Lords propose making tech giants pay for using news

The UK government should introduce a compulsory “news bargaining code” to force digital platforms to pay news publishers for the right to use their content, says the House of Lords Communications and Digital Committee.

In the committee’s report Breaking news? The future of UK journalism, published on 27 November, the peers said there was a “fundamental imbalance of power” between publishers and digital platforms, specifically Google and Facebook, as their dominant market positions meant they could stipulate the terms on which publishers’ content is used.

“This includes whether and how much they pay for news appearing on their platform, which news sources their algorithms rank most highly, and how much notice they give publishers of changes to these algorithms,” said the report, adding that the government should use the Online Harms Bill as a chance to legislate for a “mandatory news bargaining code modelled on the Australian Competition and Consumer Commission’s proposal”.

Under the Australian proposals, news publishers would be allowed to collectively negotiate with the platforms, a process that will independently arbitrate if the parties cannot reach a deal.

Both Facebook and Google have been highly critical of the proposals, with the former announcing that it would ban Australian publishers and users from sharing news on its platform if implemented, and the latter complaining that it was “extremely one-sided and unfair”.

Peers also said they wanted a Digital Markets Unit (DMU) – proposed as part of the Furman Review in March 2019 – to be set up as a matter of urgency, so that it could manage the code and help regulate the behaviour of online platforms.

“The DMU would have power to enforce codes of conduct for platforms with ‘strategic market status’ and make transformational ‘pro-competitive interventions’,” said the report. “These interventions could include separation remedies in the open display advertising market, requiring Google to provide data to rival search engines, and requiring social media companies to increase the interoperability of their platforms, such as by giving users the ability to view posts from friends on other social platforms.”

Committee chairman Lord Gilbert said publishers need the platforms far more than the platforms need them, and that they have been disadvantaged by a “dysfunctional online advertising market”.

“It is essential that the government acts swiftly to remedy this and sets up the Digital Markets Unit as a matter of urgency,” he said. “The possibility that it could be delayed until 2022 or later is unacceptable – the news industry can’t afford to wait that long.”

Both Lords and MPs have previously expressed frustration about delays in the Online Harms Bill, as well as the lack of a full government response to the online harms whitepaper published in April 2019, which put forward the world’s first framework designed to hold internet companies accountable for the safety of their users.

The government gave its initial response to the whitepaper in February 2020, when it put forward the proposal for Ofcom to be the online harms regulator. But in the government’s own press release announcing its initial response, it said the full response would be “published in the spring”.

In a separate announcement, also made on 27 November, the government unveiled its plans to set up a dedicated DMU, which it has said will work closely with regulators, including Ofcom and the Information Commissioner’s Office, to introduce and enforce a new code to govern the behaviour of platforms that currently dominate the market.

“Digital platforms like Google and Facebook make a significant contribution to our economy and play a massive role in our day-to-day lives – whether it’s helping us stay in touch with our loved ones, share creative content or access the latest news,” said business secretary Alok Sharma. “But the dominance of just a few big tech companies is leading to less innovation, higher advertising prices and less choice and control for consumers.”