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01 August 2019

NMA: Tech Giants Should Reveal Monetary Value Extracted From News Industry  

The tech platforms should be required to reveal the monetary value they extract from UK news content annually to inform a greater understanding of the digital advertising value chain, the News Media Association has said today.

In its response to the Competition and Markets Authority’s statement of scope, the first step in its market study into the online platforms such as Google and Facebook, the NMA welcomed the CMA’s intention to examine the role of the platforms, tech vendors and other intermediaries in the “complex and opaque ad tech market.”

“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,” the NMA said.

In its response, the NMA outlined a series of measures and potential areas for the market study to look at to help solve the issue of the tech giants siphoning off revenue from the content creators.  

Sitting within the CMA, a new Digital Markets Unit should be established by statute and given effective monitoring and enforcement powers to oversee the new remedies, including drawing up and overseeing a binding code of conduct for online platforms of “strategic market status,” the NMA said.  

The codes - central recommendations of both the Cairncross and Furman Reviews and supported by the CMA – would apply to digital advertising and to the related issue of how online content is surfaced and ranked, and would ensure that practices controlled by the major online platforms adhere to “standards of fairness, good competitive practice, openness and transparency.”

Other recommendations include requiring the tech companies - the “unavoidable business partners” for news media - to give reasonable notice of any changes to terms of business or algorithms which impact on news publishers and clearly explaining the reasons for doing so.

Another important part of the study will be to investigate how the major online platforms control the ecosystem in relation to collecting, aggregating, processing and selling the personal data they gather from news publishers and others to drive their ad revenues, the NMA added.

Google’s Accelerated Mobile Pages– which allows Google to retain the “all-important” user data while inhibiting the publisher’s ability to sell targeted advertising directly - should also be examined as part of the study, as well as Facebook’s Instant Articles.

The tech platforms should also be required to reveal the importance of news content to their businesses in terms of the monetary value they extract from UK news content annually to inform a greater understanding of the digital advertising value chain.

“A US study found that Google received an estimated $4.7 billion from US news publishers’ content in 2018. Where they do extract value from publisher content, directly or indirectly, they should negotiate fairly with publishers to determine how that value should be shared in order to ensure an appropriate level of compensation to publishers for the use of their content,” the NMA said.  

The market study could also explore how real time bidding in programmatic trading can directly incentivise clickbait practices and similar types of behaviour which has been shown to fuel fake news sites and other harmful content online, to the benefit of tech platforms, agencies and other intermediaries, but to the detriment of consumers, advertisers and the publishers of genuine news.

“The CMA market study is welcomed by the news media industry. We believe it should lead to a market investigation reference and the introduction of tough and effective remedies,” the NMA said.  

“It is hoped that this will ultimately help to rebalance the digital advertising market so that revenues once again follow audiences and advertisers can once again be confident that their brand messages are seen by real people viewing real content in a brand-safe environment.

“This will ultimately benefit consumers, advertisers, publishers and the platforms themselves.”