Exploring the Unequal Distribution of Revenue Generated from Digital Content

In the present digital landscape, tech platforms like Google and Facebook dominate the scene by amassing and disseminating news and other content created by various publishers. These platforms profit directly or indirectly from the resulting traffic, leaving the original content producers with minimal or insufficient revenue. This unequal system has instigated a global discussion on the necessity and method of revenue sharing between content creators and distributors.

International Approaches to Revenue Sharing: Laws and Results

Australia: The News Media Bargaining Code

In 2021, Australia became a pioneer in addressing this issue by implementing the News Media Bargaining Code (NMBC), a legislation obliging large tech platforms operating within the country to compensate local news publishers for their content accessible or linked on these platforms. Unable to negotiate settlements, arbitration would step in to resolve disputes. Any breach of agreements could result in civil penalties up to A$10 million ($7.4 million). This legislation, devised by the Australian government and the Australian Competition and Consumer Commission (ACCC), led to multiple successful deals.

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France: Taking on Dominance Abuse

Meanwhile, the French Competition Authority (FCA) probed an abuse of dominance case against Google over unfair transaction terms with publishers. Google proposed to resolve ‘the copyright dispute over digital content and revenue sharing’ and agreed to negotiate with news platforms, while also retracting an appeal against a Rs. 500 million fine.

Spain: Negotiating under Copyright Law

Spain’s experience with this issue contrasts with other countries. The imposition of a monthly fee on Google to be paid to newspapers in 2014 led to the shutdown of its news platform. However, in 2021, Spain revised its copyright law in line with European Union regulations, requiring platforms to negotiate revenue-sharing deals with publishers. Consequently, Google News reopened in Spain in June 2022.

Contrasting Results: Australia vs France

Australia’s approach, leveraging its competition law to draft the NMBC, proved more effective than the copyright law route taken by other countries. The difference was clearly seen when Australia’s two largest TV broadcasters secured deals worth A$60 million ($47 million) annually with Google. On the other hand, in France, a $76 million deal with Google was distributed among 121 publishers over three years, averaging to $209,000 per year per publisher.

North American Responses

In June, Canada passed the Online News Act, compelling Big Tech to negotiate commercial deals with publishers for their content. In the US, the California state assembly introduced a bill to impose a ‘journalism usage fee’ on tech platforms, necessitating them to share a portion of their advertising revenue with publishers.

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The Indian Scenario: Digital Publishers and Revenue Sharing

Despite the absence of a legislation or policy for equitable revenue-sharing with digital publishers in India, the government has expressed its interest in addressing this issue. The Union information and broadcasting secretary highlighted the importance of digital publishers receiving a fair share of revenue generated by Big Tech hosting their content, at the Digital News Publishers Association (DNPA) conference this year.

Minister of state for IT and electronics Rajeev Chandrasekhar emphasized the uneven power dynamics between platforms and creators, with platforms exerting ‘disproportionate control’ over ad revenues. He stated that the government is contemplating revising IT laws to facilitate necessary changes.

The Competition Commission of India (CCI) is also investigating this matter. Various entities such as DNPA, News Broadcasters and Digital Association (NBDA), and the Indian Newspaper Society (INS) have approached the CCI regarding unfair and arbitrary revenue-sharing agreements, unjust conduct in advertising intermediation services, free-riding of content on digital media platforms, and the abuse of dominance by Google in terms of Service agreement.

Given India’s fast-paced digitization trajectory, resolving the issue of fair revenue-sharing between digital platforms and media companies is crucial. It’s evident that Big Tech and publishers need each other; therefore, a fair split of revenue between news content creators and aggregators is vital for the rapid and sustainable growth of the internet economy.

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