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Google vs Publishers: Government regulation the only way out?

Digital media experts say Indian government should take a cue from authorities in Australia, and France besides the European Union that have mandated Google to compensate the publishers

e4m by Javed Farooqui
Published: Jan 21, 2022 8:50 AM  | 4 min read
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Even as the Competition Commission of India (CCI) has ordered an investigation against Google for alleged abuse of dominant position in the digital advertising market, experts believe that the government intervention is the only way out for publishers to get their fair share of digital ad revenue from the search engine giant.

The CCI order came on a complaint filed by the Digital News Publishers Association (DNPA) which 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.

According to a digital media expert, the Indian government should take a cue from governments in Australia, and France besides the European Union that have mandated Google to compensate the publishers for their news content.

"No private player will be able to do anything unless the government says that this is creating a monopoly and the country is also losing out on taxation. If that doesn't happen, nothing will happen. Australia has asked Google and Facebook to share ad revenue with news providers," the expert said, requesting not to be named.

The expert noted that the second problem in India is the cheap pricing of digital ad inventory by Google, which makes any revenue share arrangement with publishers irrelevant. "The issue in India is the low pricing that has happened because of the dominance of one player. To grow its market share, Google has priced the inventory to a level where even if they share revenue, there is nothing much to share. For example, even if they share 50% of the revenue, 50% of a small amount is a very small amount," he added.

He further stated that news publishers will have to look for a long-term solution to this complex issue. "There are three likely solutions to this problem. 1) News publishers should come together and form an ad tech kind of group, 2) Big publishers should invest in building their own ad tech engines and ramp up pricing, and 3) the Indian government should intervene and ask Google/Facebook to pay up."

"The question is, will the news guys come together and do something or will they individually start focussing on building their ad-tech business much like what Times Internet has done? If Times Internet can do it, I am sure others can also do it," he averred.

The digital head of a leading media conglomerate noted that mature markets like Australia have shown the way forward in terms of dealing with monopolies like Google. "The regulatory action will be the primary requirement. As far as investment in technology is concerned, news publishers are investing a fair bit of money in the aggregation of news, fact checks, and building audience base through authentic news," the executive said.

Till the time publishers remain dependent on Google search engine for traffic, this issue will continue to plague the industry. "We can't change consumer habits. As long as traffic comes through search, this will continue to be a challenge as Google dominates search advertising. It has to be a combination of industry and regulatory effort to put pressure on the walled gardens to deliver fair value to publishers. Currently, most digital news publishers make a big chunk of money through brand advertising," the executive stated.

TMT Law Practice Managing Partner Abhishek Malhotra said the CCI order is on the lines of action taken on similar allegations against Google by competition authorities in different parts of the world including France and Australia. "It remains to be seen whether Google will enter into agreements with digital news publishers to share more of the ad revenues with them and resolve these allegations or continue to fight on this additional front at the CCI. This order is further indication of the maturity of our competition regulator’s approach to the interplay between IP and competition law."

The Indian Newspaper Society (INS), which is the apex body of print media companies, has been striving for the last many years to get a fair deal from Google for its members. In March 2021, the INS had demanded that Google should increase the publisher’s share of advertising revenue to 85%.

In his last address as INS President, Lakshmipathy Adimoolam, who is also the Director of Tamil daily Dinamalar, had said that the social media companies earn revenue from news content at the expense of publishers. "Today, publishers promote verified news on their websites, however, it is the social media companies that take away a large chunk of the revenue. This calls for collective bargaining. At this juncture, I, on behalf of the industry, request the advertising bodies to work in tandem with all publications to ensure mutual growth," he had said.

exchange4media has reached out to Google for its comments on the issue.

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