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TRAI hints at regulatory intervention on revenue share between Facebook, Google and print media

BL Mumbai Bureau | | Updated on: Apr 16, 2022

TRAI move assumes significance even as Google faces CCI probe over denial of fair share of ad revenue to news publishers

The Telecom Regulatory Authority of India (TRAI) has hinted at the possibility of regulatory intervention to enable Indian news media to get a revenue share from tech giants like Google and Facebook. The regulator is of the view that policy interventions in other countries have played a significant role in addressing the grievances of the news publishers and bringing the parties to the negotiation table.

“Digital media is a rapidly developing area. In future, new tech giants may also join the digital media. Consequently, certainty, stability and predictability in the regulatory regime is required," TRAI said in a consultation paper issued recently.

The regulator’s observations assumes significance in the light of the ongoing investigations being carried out by the Competition Commission of India into complaints against tech giant Google for alleged abuse of its dominant position in the online news media market. The plaint, filed by Indian Newspaper Society (INS), claims that while the news content is that of the publishers, Google gets to keep a disproportionately large share of the advertising revenue as the tech giant continues to control the whole ecosystem including both the buying and selling side of the ad network.

Print media in crisis

This tussle between tech giants and news outlets comes even as the global print industry has been affected by the unfavourable macroeconomic conditions such as the ease of access, online availability of news, and overall global economic slowdown occasioned by the outbreak of pandemic.

In India, too, the print media segment has been growing at a subdued rate for the past few years. According to industry reports, print segment shrunk by 8.3 per cent during 2019-20 with circulation revenue dwindling at the rate of 4.2 per cent. Further, Hindi and regional newspaper circulation revenue fell by 20 per cent in 2020 compared with 2019, while English dailies circulation revenues fell by 50 per cent., according to the TRAI paper.

Acknowledging the crisis being faced by the print media industry, TRAI said that even though the print industry is adopting the digital innovations, they are unable to tap the benefits of digitization due to the commanding share of tech giants like Facebook, Google, Twitter, Instagram.

Fair share of revenue

“According to Edelweiss Research, the Facebook-Google duopoly controls 60 per cent of all the digital spending. The publishers allege that these tech giants are making money by advertising on the strength of their news content though Facebook and Google claim that they are basically helping publishers by directing traffic to their website. In the past two years, internationally, quite-a-few state agencies have intervened in the ongoing tussle between Google-Facebook on one side and press and publishers on the other. Countries like Australia and France have come up with laws for the fair sharing of revenue between these tech giants and press publishers,” TRAI said.

In a bid to keep regulators away, Google has decided to launch News Showcase and Facebook has come up with the news tab where they will pay for the news to the publishers. But, according to industry experts, there has to be a more structured way to compensate publishers.

In February, INS, an association representing around 800 publishers, approached Google asking it to compensate them for carrying their content online and share 85 per cent of the ad revenue. It said that Google is taking a ‘giant share of advertising spends’ leaving publishers with a small share and that the publishers are facing a very opaque advertising system as they are unable to get the details of the Google advertising value chain.

“In the light of the initiatives of Google and Facebook, there is growing opposition against the state intervention and support to the self-regulatory regime. However, one cannot deny that state interventions have played a significant role in addressing the grievances of the news publishers and bringing the parties to the negotiation table. Further, digital media is a rapidly developing area. In the future, new tech giants may also join the digital media. Consequently, certainty, stability and predictability in the regulatory regime is required,” TRAI said.

Published on April 16, 2022
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