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Thursday, May 26, 2022


Tech giants, Facebook, Google, others to pay for news in a new law by British Govt

Tech giants such as Google and Facebook face being required to pay newspapers and other media outlets for using their stories, under a new law being proposed by the British Government.

The Queen’s Speech contains a Draft Digital Markets, Competition and Consumer Bill.

It outlines plans to make sure powerful social media platforms  treat businesses that use them professionally ‘are treated fairly and can succeed without having to comply with unfair terms’

Under the plans, which are modelled on a system that has been introduced in Australia, the platforms will be encouraged to negotiate payment deals with news organisations. If the negotiations fail, an independent arbitrator would set a fair price.

The move, being driven by Culture Secretary Nadine Dorries, comes amid growing concerns that the tech companies are dominating online advertising, to the detriment of consumers and businesses.

Under the new law, the Digital Markets Unit (DMU) created last year in the Competition and Markets Authority would be able to target a small group of ‘very powerful’ digital firms ‘such as social media and online search.’

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These would then be subject to ‘legally enforceable rules and obligations to ensure they cannot abuse their dominant positions at the expense of consumers and other businesses.’

The DMU will also get powers to ‘proactively address the root causes of competition issues in digital markets.’

Dorries has told her officials that the DMU should be given ‘robust powers’ to ‘drive fair terms between publishers and platforms’ by introducing a binding arbitration, and be ‘explicitly granted new powers to act swiftly and effectively where the regulator finds that a platform has not offered fair and reasonable remuneration for its use of publisher content.’

Google and Facebook took about four-fifths of the £14 billion spent on digital advertising in the UK in 2019, while national and local newspapers took less than four per cent. Google charges between 30 and 40 per cent more for search advertising on desktop and mobile devices than Bing, its closest rival.

The DMU is also being given powers to levy large fines on online companies to prevent customers or companies from being treated unfairly and to make firms give smaller rivals access to their vast troves of data.

Facebook argues that it already helps to support UK publishers by paying tens of millions of pounds to national and local outlets to be part of Facebook News and as part of the Community News Project, which funds 80 trainee reporters in newsrooms across the country.

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