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06 May 2022

NMA Welcomes Government’s ‘Clear Commitment’ To Give DMU Statutory Powers

The News Media Association has welcomed the government’s “clear commitment” to give the Digital Markets Unit the statutory powers it urgently needs but said the important legislation must now be brought forward as a matter of urgency.

The government has outlined plans for how the Digital Markets Unit will create a new pro-competition regime for the digital marketplace including introducing a legally binding code of conduct to underpin meaningful payment for news publishers' content by the tech platforms.

NMA chief executive Owen Meredith said: “We welcome the government’s clear commitment to give the Digital Markets Unit the statutory powers it urgently needs and note the widespread support for the new regime from respondents to the consultation.

"We also welcome the government's commitment to press sustainability and acceptance of CMA and Ofcom proposals to introduce a legally binding code of conduct with binding final offer arbitration as a mechanism to underpin meaningful payment for news publishers' content by the tech platforms.   

“This pro-competitive and pro-innovation intervention is long overdue and we now urgently need to get on with passing this important legislation so the DMU has the tools it needs to get on with the job. The Queen’s Speech on Tuesday is the obvious opportunity to take this forward via a Digital Competition Bill.”

Publishing the Competition and Markets Authority and Ofcom’s advice on a code of conduct for platforms and publishers, CMA chief executive Andrea Coscelli called for the necessary legislation to be brought forward “as quickly as possible.”

“News content occupies a particularly important place in our society. In contrast to other forms of content, the provision of news content from a variety of voices and sources, accessible to the public, is vital to the functioning of our democracy,” the regulators said.

“The relationship between news publishers and digital platforms therefore has a significance beyond the mechanics of their transactions.”

Citing NMA evidence on multiple occasions, and referencing the CMA’s market study, the advice listed the way the platforms behaviour may “adversely affect publishers” in several ways including:

  • "Lack of transparency over algorithms: Platforms use algorithms to analyse consumer behaviour and assess what content to present to them. Minor changes to algorithms, which are outside the publishers’ control, can have a significant impact on the traffic they receive, and therefore their revenues.
  • Limited access to data on user engagement: Many publishers feel they have no option but to put content in mobile web formats hosted on the platforms’ servers. This gives the platforms control over how much data publishers receive on users’ interaction with their content, and their ability to monetise the content through advertising.
  • Limited control over content presentation and branding: Platforms’ control over the presentation and attribution of content can lead to a loss of consumer understanding of its original source, to the detriment of the publisher’s brand. 
  • Fair payment for content: Publishers are concerned that platforms ‘free ride’ on online content, providing little or no compensation while using it to attract users and generate advertising revenue."

This “imbalance of bargaining power between platforms and publishers” affects the publishers’ ability to negotiate terms for payment for content, and this imbalance could be addressed through a code, the regulators said.

“We also think there is a need for a backstop enforcement power, to ensure code breaches do not persist for long periods.

“In some circumstances we expect that the regulator determining what is fair and reasonable would be effective, but binding arbitration (and in particular final offer binding arbitration) has attractive properties that would be beneficial in some cases.”

The new regime could lead to “significant benefits” in setting a level playing field for the future relationship between platforms and publishers would ultimately benefit consumers by ensuring that there are continued incentives for publishers to invest in high-quality content.