Thursday, July 18, 2024

Google, Meta may have to pay for news if India brings a new law for Big Tech

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The new law will be in addition to the proposed Digital Competition Bill, on which the government has completed public consultation, according to three persons with direct knowledge of the matter. 

A parliamentary standing committee on finance led by Jayant Sinha had in 2022 proposed regulatory provisions to ensure news publishers can establish fair and transparent contracts with influential technology companies.

It was, however, not included in the Digital Competition Bill being steered by the ministry of corporate affairs, which seeks to establish ‘dos and don’ts’ for Big Tech to ensure fair competition in digital markets, explained one of the persons mentioned above.

“The proposal for ensuring a level playing field between news aggregators and news publishers is under consideration of the ministry of information and broadcasting. The idea of evolving a separate law is being looked into,” said a second person.

The I&B ministry is studying Australia’s news media bargaining code and similar laws in the pipeline in other countries, this person added. 

Also read | Why we need a new competition law for big tech companies

A legal expert who has handled competition matters in media and Big Tech sectors said a separate framework for ensuring fair deals between news businesses and digital platforms under the I&B ministry would also suffice.

“Merely the fact that there is a regulation in place has forced Big Tech to come to the negotiating table with news publishers in countries where these frameworks are in place, under the fear that they will be penalised for abusing their position if there is a complaint,” said the expert, who spoke on condition of not being named. “This has resulted in revenues of digital news publishers increasing by leaps and bounds.”

Emails sent on 24 June to the I&B and corporate affairs ministries, the Competition Commission of India, Google, Microsoft and the Digital News Publishers’ Association seeking comments remained unanswered. Meta did not immediately reply to queries sent on Tuesday.

A power imbalance

India and other nations are exploring the need for a legal framework to ensure fair contracts between news organisations and Big Tech. Policymakers see a bargaining power imbalance between media organisations, which invest heavily in their news operations, and tech giants that enjoy an edge in the digital market connecting advertisement buyers and sellers.

The committee led by member of Parliament Jayant Sinha had proposed increased disclosures by the digital platforms and restrictions on their use of the data of news consumers.

The Digital News Publishers Association in India had told the committee that framed the Digital Competition Bill that it was in favour of forward-looking regulations for Big Tech to ensure a level playing field between large digital enterprises and news publishers, according to the report of the committee. 

Also read | Digital competition bill has good intentions, but it might affect how you Google

“At the face of it, it doesn’t look like it is an issue for which a separate law is required for the Indian industry. However, the government can facilitate the stakeholders to come to the table and thrash out an arrangement that is fair to all,” said Amol Kulkarni, director of research at CUTS International, a non-profit working on public interest issues.

“The industry should be able to better serve the market on its own. If that does not happen, the government can step in,” Kulkarni said, adding that it was essential to ensure that the interests of both big and small publishers are taken into account. 

India’s advertising industry had an estimated market size of 93,166 crore in 2023, of which digital advertising accounted for 40,865 crore, exchange4media reported on 8 February citing a report jointly prepared with advertising and public relations agency Dentsu Inc. It added that digital advertising had grown 36.6% annually in 2023.

A Pyrrhic victory?

Australia’s bargaining code of 2021 allows eligible news businesses to bargain with digital platforms such as Meta and Google alone or collectively on payments for the inclusion of news on their platforms. Canada also introduced a law last year to promote fairness in the country’s digital media news market.

In November 2022, Australia declared its ‘News Media and Digital Platforms Mandatory Bargaining Code’ a success. 

“Over 30 commercial agreements between digital platforms (Google and Meta) and a cross-section of Australian news businesses have been struck, agreements that were highly unlikely to have been made without the Code,” the Australian government said in a review following one year of the media bargaining code. 

“On the evidence available to the review, at least some of these agreements have enabled news businesses to, in particular, employ additional journalists and make other valuable investments to assist their operations,” it said.

In March this year, however, Meta announced that it wouldn’t renew deals with traditional news publishers in Australia and the US.

Also read | Digital Competition Bill: Its core needs strengthening

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