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Google and Facebook should share how much money they 'extract' from news industry, says NMA

US tech giants Google and Facebook should reveal how much money they extract from the news industry, the News Media Association has said.

The trade body, which represents regional and national media, argued that the measure needed to be taken so the news industry could have a “greater understanding of the digital advertising value chain”.

It also called for a “digital markets unit” to be set up within the UK’s competition watchdog to oversee a “binding code of conduct for online platforms of ‘strategic market status'”.

The NMA’s push for greater ad market transparency came in a response to the Competition and Markets Authority’s investigation into Google and Facebook’s dominance of digital advertising.

The CMA revealed last month that it would review whether or not competition in the digital ad market is “distorted” by the two firms.

It said its study would specifically look at “the sources of any market power, the way they collect and use personal data, and whether competition in digital advertising is producing good outcomes for consumers”.

Responding to the scope of the CMA study, the NMA said: “We believe it should lead to a market investigation reference and the introduction of tough and effective remedies.

“It is hoped that this will ultimately help to rebalance the digital advertising market so that revenues once again follow audiences and advertisers can once again be confident that their brand messages are seen by real people viewing real content in a brand-safe environment.”

It added: “To inform a greater understanding of the digital advertising value chain, the tech platforms should also be required to reveal the importance of news content to their businesses in terms of the monetary value they extract from UK news content annually.

“A US study found that Google received an estimated $4.7bn from US news publishers’ content in 2018.

“Where they do extract value from publisher content, directly or indirectly, they should negotiate fairly with publishers to determine how that value should be shared in order to ensure an appropriate level of compensation to publishers for the use of their content.

“Similarly, the platforms should not act in ways which impede the ability of news publishers to monetise their content online.”

The NMA also proposed that the CMA investigates “how the major online platforms control the ecosystem in relation to collecting, aggregating, processing and selling the personal data they gather from news publishers and others to drive their ad revenues”.

Press Gazette has contacted Google and Facebook for a response to the NMA’s comments.

The NMA’s response to the CMA digital ad market study comes after a forecast by ad agency Group M predicted that advertising spend on newspapers and magazines would make up less than 10 per cent of the UK market this year.

Group M predicted that all newsbrands and magazines (consumer and B2B) will take home a combined 9.3 per cent share of all UK ad money in 2019, while also forecasting that Facebook and Google will hoover up around three-quarters of UK digital ad spend on a gross basis.

Picture: Pixabay

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