UK publishers join international move toward power balance in digital platform relations

By L. Carol Christopher

INMA

Pleasant Hill, California, USA

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The UK is appointing a new regulator to curb digital platform power over news publishers and other entities. A new Digital Markets Unit (DMU) will be based in the Competition and Markets Authority (CMA) and work with the UK communications authority, Ofcom, “to look at a code of conduct to regulate the arrangements between news publishers and online platforms,” according to ZDNet.

According to Reuters, Britain’s Digital Secretary Oliver Dowden has asked the DMU to examine whether a code would ensure fair and reasonable relationships between the two groups. In a statement, he said: “This will pave the way for the development of new digital services and lower prices, give consumers more choice and control over their data, and support our news industry, which is vital to freedom of expression and our democratic values.”

Britain’s Digital Secretary Oliver Dowden.
Britain’s Digital Secretary Oliver Dowden.

The UK’s Business Secretary Kwasi Kwarteng said the DMU will be an “unashamedly pro-competition regime.”

The new unit was first announced in November after the CMA concluded that “Google had significant market power in search and in search advertising, and Facebook had significant market power in social media and in display advertising.”

The CMA charter 

Matt Rogerson, director of public policy at Guardian News & Media, explained to INMA that the CMA has undertaken a thorough market study, publishing a world-leading report examining the way in which online platforms with strategic market status (SMS) have become key gateways for consumers and businesses. “The CMA has concluded that these online platforms set rules, act on conflicts of interest, and engage in practices that enable vast profitability for themselves, but which run counter to competition and to the wider public interest. “ 

The authority, he continued, is “right to focus time and resources on the development of a new DMU that seeks to regulate the conduct and behaviour of platforms with SMS through codes of practice that will enforce fair trading, fair access, and fair choices. Such codes are vital to empower businesses and consumers in the digital economy, and to enable competition and innovation in markets where this is currently severely lacking.” 

INMA member Chris Duncan, CEO of UK Publishing at Bauer Media, told us: “An ex-ante regulator for digital markets was the right choice given the complexity and opacity of these markets and the speed at which they change.

“We are seeing right before our eyes this week how privacy changes in one platform create a reaction in another, and UK publishers and consumers should be protected where necessary as they would be in any other consumer or B2B market. The code of conduct then follows; the regulator I think has to establish, communicate, and govern a framework within which to make those decisions.”

International coordination 

According to Reuters, Britain’s Digital Secretary Oliver Dowden plans to host digital and tech ministers this month to discuss coordination with international partners. A government statement said there is a “growing consensus in the UK and abroad that the concentration of power amongst a small number of tech companies is curtailing growth in the tech sector, reducing innovation, and potentially having negative impacts on the people and businesses that rely on them.”

Daniel Gordon, senior director of markets at the CMA, seems inclined to the Australian model, and has said that any code would need to be statutory and therefore enforceable by law. 

Rogerson shared his take: “In terms of the news media bargaining code in Australia, we were supportive of the ACCC's approach, believing it is a key step in addressing the asymmetry of bargaining power between publishers and online platforms with SMS. A version of the code in the UK could be a pragmatic and effective way of leveling the playing field in negotiations, as news publishers seek to realise the commercial benefit that online platforms gain through the use of copyright content.”

The legislation

The unit is currently awaiting government legislation for its powers, but until then, will “look at how new codes of conduct could work between Big Tech platforms and small business that rely on them to reach customers,” wrote ZDNet.

Bauer’s Duncan said: “I think legislation is required to put in place adequate protections that generate a fair valuation of content. The better publishers will be able to turn this into a sustainable future because their content has high value.”

But thinking in the UK has been expansive and inclusive.

Said Duncan: “I think it is dangerous to limit the scope of this thinking to news publishers. Many of the harms under discussion are wide questions of intellectual property rights or of privacy and how internet publishing develops over time; the harms and protections here apply to the whole creator economy not just daily newsrooms. The aim of any legislation should be to protect content rights whether these are for newspapers, magazine,s or audio products from individual creators — we have to think bigger than general news provision, important though that is.”

GNM’s Rogerson likewise believes “legislation is necessary to level the playing field between online platforms and every business — not just in the news publishing industry — and consumer that interacts through the digital economy. Over time, we have become accustomed to an online marketplace in which a very small number of businesses, dictate the terms on which we live our lives and interact online.” 

He listed the measures necessary to ensure the sustainability of digital businesses, saying, no single measure” will enable that … “rather it will be a range of measures that are necessary,” including rules that: 

  1. Reduce conflicts of interest in the provision of advertising technology.
  2. Increase the transparency and accountability of an advertising market that does not currently serve the interests of advertisers, publishers or consumers.
  3. Create competition in app store payments processes to prevent incumbents from taking exorbitant fees for transactions that cost almost zero.
  4. Ensure equal enforcement of data protection laws to ensure vertically integrated online platforms with SMS provide consumers with the same choices as to how their personal data is used, as independent websites as app developers do by law.
  5. Implement mechanisms that enable publishers to negotiate with online platforms for the commercial value  they gain from the use of high-quality content.

Like many publishers INMA has spoken with, Duncan said Bauer supports “fair competition and wants markets to work successfully to reward content creators for their investment and their efforts.”

“While we work with all of the major platforms on many initiatives as partners,” he said, “we are also supportive of a level playing field where they do not operate in an unrestrained and unregulated way that can create long term damage to the cultural fabric of the UK.”

About L. Carol Christopher

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