Culture Secretary Calls On CMA To Investigate Digital Advertising Market

Culture Secretary Jeremy Wright has urged the Competition and Markets Authority to launch an investigation into the digital advertising market following the publication of the Cairncross Review which made a series of detailed recommendations on how to support quality journalism.

In a Commons statement following publication of the report, the Culture Secretary thanked Dame Frances and laid out some of its recommendations which the Government would seek to “progress immediately,” the first of which was his support for a CMA study into the digital advertising market.  

He said: “Online advertising now represents a growing part of the economy and forms an important revenue stream for many publishers, but this burgeoning market is largely opaque and extremely complex, and it is impossible to know whether the revenue shares received by news publishers are fair.”

Mr Wright added he would also urge Professor Jason Furman to treat the review as additional evidence in his ongoing inquiry into digital competition in the UK, whose findings are due to be published in the spring.

The News Media Association, which since 2016 has been calling for the CMA to look at the digital advertising marketplace, welcomed the report which repeatedly stressed the crucial importance of journalism to democratic society while acknowledging the severe challenges of monetising content.

The NMA said: “This is a thoughtful report which recognises the critical role of written journalism to democracy and sets out a series of detailed recommendations, many of which respond directly to the proposals put forward by the NMA and our members.

“These include a Competition and Markets Authority market study into the ‘complex and opaque’ online advertising market, new measures aimed at constraining the behaviour of the online platforms, an examination of the BBC’s impact on commercial publishers, funding support for local news publishers, and tax reliefs such as extending VAT zero rating for online news publications.

“We look forward to engaging with the government to discuss the Cairncross recommendations in more detail and how these should be taken forward as a matter of urgency to ensure they support independent journalism delivered by a strong and sustainable press.”

Outlining Government actions following publication of the report, Mr Wright also said that he had had written to Ofcom to look at the review’s recommendation to assess whether or not BBC News Online was diverting traffic away from commercial publishers and “identify any new concerns that deserve attention.”

He added: “For instance, there may be ways in which the BBC could do more to drive traffic to commercial sites, particularly the local press.”

The review also called for the expansion of the NMA/BBC Local News Partnerships scheme which Mr Wright said was a “shining example of what can be done.” Referring to the LNP parliamentary reception last week, Mr Wright said: “I met some of those reporters last week. So far, they have produced 50,000 stories between them, all of which might not otherwise have been heard. The Government will explore, with others, what more can be done in that regard.”

Turning to the report’s recommendations around tax incentives for publishers, such as extending the scope of VAT exemptions to apply to online payments for news content, the Culture Secretary stressed that amending the tax regime was a matter for the Chancellor, but said he would discuss the matter with the industry and the Treasury.

Mr Wright added: “The other recommendation that I want to highlight is the call for the creation of new codes of conduct between publishers and the online platforms that distribute their content. The codes would cover issues relating to the indexing of content on platforms and its presentation, as well as the need for advance warning of algorithm changes likely to affect a publisher.

“Their development would be overseen by a regulator. The review also proposes that regulatory oversight be introduced as ​part of a “news quality obligation”, requiring platforms to improve the way in which their users understand the origin of an article of news and the trustworthiness of its source. Dame Frances recognises that platforms are already starting to accept responsibility in that regard.

“Those two proposals deserve the Government’s full consideration, and we will think about how they can inform our approach. Our consideration will include our work on the online harms White Paper, which is due to be published shortly.”