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12 September 2019

Digital Markets Study: Content Creators Call For ‘Prompt and Decisive Action’ From CMA

Broadcasters and publishers have called for “prompt and decisive action” from the Competition and Markets Authority to address the tech giants’ dominance of the digital advertising market and the siphoning of revenues away from the content creators.  

In its response to the Competition and Markets Authority’s statement of scope, the News Media Association outlined a series of measures and potential areas for the market study including introducing a requirement for the tech giants to reveal the monetary value they extract from UK news content annually.

The NMA said: “Google’s dominant hold over every stage of the digital supply chain, from demand side platforms to supply side platforms, ad servers to data management platforms and real time bidding specs, effectively locks in publishers and advertisers and drives out competitors.”

In its response, published on the CMA website yesterday, dmg media highlighted a range of issues including the absence from the statement of scope of any reference to the “pivotal issue” of digital platforms acting as traffic allocators for news publishers and the related issue of the platforms’ opaque ranking algorithms.

“No news publisher can point to the specific changes in the algorithms which cause these dramatic changes and anomalies in search results – because the algorithms are secret. But the ability of digital platforms to decide what internet users see in terms of news is huge,” the publisher said.  

“In newsprint terms, a Google or Facebook algorithm shift is the equivalent of WHSmith deciding that on Royal Wedding Day readers of the Daily Mail are given the Telegraph, and during the World Cup Sun readers get the Guardian."

Although the issue of the data collection through “walled gardens” should be examined, display advertising on the open web should be the primary focus of the CMA’s efforts, dmg media said, with the opacity Google’s ad tech stack addressed.

The CMA should also consider a structural remedy, whereby Google would have to divest some elements of its suites of ad tech products to address “anticompetitive practices.”

The publisher added: “If the Market Study reveals that the digital advertising market ‘is not found to be working well’, the CMA should take prompt and decisive action. The news publishing industry will not be able to survive much longer in a situation where digital advertising revenues are almost entirely captured by the Google/Facebook duopoly.”

Guardian Media Group’s response called for the inclusion of audio speakers and audio assistants in the statement of scope as many of the concerns around the distribution of journalism in the digital environment will be relevant to that.  

While cautioning of not doing anything to impact negatively upon freedom of speech, the publisher called for the establishment of a digital markets unit in line with the Furman recommendations adding that the unit should be a standing statutory regulator that can examine existing and emerging issues with the practices of platforms with strategic market status.

GMG said: “It is vital that any such efforts by the CMA deliver behavioural remedies against platforms with strategic market status, as opposed to monetary penalties that have recently been levied by regulators in the US and EU.

“It is vital that the CMA learns the lessons from other sectors, notably the grocery sector, and moves to the creation of a regulator that has statutory powers to enable information collection and the imposition of behavioural remedies.”

The publisher added: “We are currently operating in a market where there are some clear imbalances in the degree to which advertising through established media channels (newspapers, online news sites, radio, TV) is subject to external oversight and metrics, compared to the lack of regulation of advertising that appears on dominant search and social platforms.”

The European Publishers Council used its submission to call on the Government to transpose the Publisher’s Right, a key measure which the industry and NMA fought to be included in the Copyright Directive, into UK law “without delay.”

“This is particularly important given the widespread unauthorised, and unremunerated re-use of British press publications which because of their quality but also because of their accessibility to the many millions who speak and read the English language in addition to their own, gives rise to an unusually high level of infringement of English language press content,” EPC said.

UKTV called for the tech platforms to fund the current Advertising Standards Authority regulatory system in line with their market share arguing that “equivalence will solve many of the issues that are bountiful in the digital advertising world.”

In its submission, Channel 4 urged the CMA to consider the implementation of regulated trading terms between broadcasters and digital platforms. “These could provide fairer access for PSBs to online audiences through the digital giants’ platforms through revenue shares that fairly reflect the risks and rewards involved,” Channel 4 said.

“The reported audience for digital advertising is heavily plagued with fraudulent, botdriven traffic. The prevalence of ad fraud, and the ongoing failure of many online platforms to successfully tackle it, risks investment decisions being made on the basis of false data and digital campaigns appearing more effective than they actually are,” the broadcaster said.  

The Professional Publishers Association said: “Publishers feel unable to negotiate, as would be the place in a functional market, and instead have terms dictated to them on a “take it or leave it” model, meaning platforms use their content to build audiences, sell advertising around that content, yet will not enter commercial discussion over the share of value that should be attributed to the content creator.”

In its submission, Digital Content Next highlighted the dominance of Google and Facebook in the digital advertising market and their ability to collect data about consumers at an “unmatched scale” and to use that data to sell targeted advertising against publishers’ content “without paying a fair share.”