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Google shares only 10-15% of digital ad revenue with news websites: Publishers tell CCI

In its complaint to the antitrust watchdog, the DNPA has alleged that Google, by way of abuse of its dominant position, is destroying the concept of ‘fair and well-researched journalism'

by Javed Farooqui
Published - Jan 20, 2022 8:38 AM Updated- Jan 20, 2022 9:38 AM  |  5 min read

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The Competition Commission of India (CCI) recently ordered an inquiry against Alphabet Inc, Google LLC, Google India, and Google Ireland for alleged abuse of dominant position in the digital advertising market following a complaint by the Digital News Publishers Association (DNPA).

The DNPA has alleged that Google is denying publishers their fair share of revenue by parting only 10-15% of the digital advertising revenue with the news websites. Further, the revenue share is divided between the digital assets of traditional media companies and pure-play digital news players.

As per the details of the traffic on news websites provided by the DNPA, online search engines provide more than 50% of the traffic, followed by the social domain (25-30%). The remaining 10-15% comes directly. Google is the most dominant search engine.

"Thus, it is safe to infer that more than 50% of the total traffic on the news websites is routed through Google. Being the dominant player in this field, Google, by way of its algorithms, determines which news website gets discovered via search. In view of the above, news websites get only 10-15% of the share of digital advertising, which too has to be shared between digital assets of traditional media and the digital native news publications," the DNPA has said in its complaint to the CCI.

Quoting a 2020 report by Dentsu, DNPA has stated that search advertising accounts for 25% share of digital advertising, and here Google exercises monopolistic control. Thanks to YouTube, Google also dominates the in-stream video advertising market, which accounts for 22% of digital ad revenues.

According to the DNPA, the only segment where traditional media companies have a relatively better presence is display advertising, whose share is pegged at 21%. "But here too, a good share is taken away by advertising agencies and various third-party intermediaries."

The DNPA has contended that Google by way of abuse of its dominant position is destroying the concept of ‘fair and well-researched journalism'. This, the DNPA argued, is not only violative of the Competition Act, 2002 but also violative of the Constitution of India, as the consumers have the right to access credible news.

The association also stated that Google is denying fair advertising revenue to publishers by way of abuse of its dominant position. It added that the tech giant has made it impossible for the DNPA-affiliated publishers to bargain for a fair share in the value chain of news dissemination.

The DNPA also accused Google of being opaque as it is not making disclosures on various aspects, including their operations such as application of technology tools, data, and audience management practices, or generation and sharing of revenue with local partners.

The abuse of dominant position by Google has led to reduced innovation, as also, potentially negative impacts on people and businesses, including the news industry, DNPA said in its complaint to the CCI. Google, it said, has denied a fair share of the revenue to the publishers for the use of snippets from the content. Further, it said that Google's dominance in the algorithmic search markets allows it to control the outcome of the searches and social behaviour of the consumers.

 The DNPA noted that the steady decrease in revenue of traditional media companies through the past decade has further been aggravated in the past two years. It added that the financial dependence of these companies on revenue from digital advertising has risen like never before.

"Traditional media companies entered the digital news environment with considerable assets, such as their credibility and trustworthiness amongst consumers, audience loyalty, newsroom capabilities, and journalistic talent. However, despite these assets and consequential investment, revenue/returns have remained dismal," the DNPA averred.

"Although, it is the content produced by news media companies that create the context for the audience to interface with the advertiser, the online search engines (read Google) end up leveraging the revenue/returns much more than the publishers."

The DNPA stated that its members are not informed of or given any data about the amount of revenue earned by Google and its associates by providing advertisements on the websites/ links of the publishers. It added that Google gives a small chunk of revenue generated from ads to the publishers in an arbitrary manner, without disclosing any basis for calculation of such revenue.

The publishers are given paltry amounts as a result of the sole, arbitrary, unilateral, and opaque decision-making processes adopted by Google, the DNPA said adding that the tech giant has refused to fairly compensate the publishers for using snippets of the content created by its members.

"The terms of the agreements entered between the members of the Informant and the Opposite Parties for sharing of the advertisement revenues are unilaterally and arbitrarily dictated by the Opposite Parties and the members of the Informant have no other option but to accept the terms, as they are, with no bargaining power whatsoever," the complaint reads.

The DNPA argued that Google's abuse of dominant position would lead to reduced innovation, reduced technical advancement, reduced improvisation of content, and numerous other negative impacts not only on the business of media industry but journalism as a whole.

"The aforesaid arbitrary and unfair acts of the Opposite Parties are detrimental and prejudicial to the interests of the consumers as also the journalism industry," the DNPA alleged.

Founded in 2018, the DNPA members include IE Online Media Services of The Indian Express Group, ABP Network, Amar Ujala, Dainik Bhaskar Corp, Express Network, HT Digital Streams, Jagran Prakashan, Lokmat Media, NDTV Convergence, TV Today Network, The Malayala Manorama, Times Internet Limited and Ushodaya Enterprises.



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