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Explained: In Google and Facebook’s Australian tussle, issues of concern for India as well

The issues being thrashed out in Australia and elsewhere could have broader implications for the regulation of the digital economy in India in the longer term.

Written by Pranav Mukul | New Delhi |
Updated: January 24, 2021 10:48:53 am
Google tussle, FB tussle, Australian tussle, Australian government, global tech platforms, indian express newsTech giant Google has threatened to remove its search engine from Australia.

Marking an escalation of the slugfest between the Australian government and global tech platforms over the sharing of royalties with news publishers, Google has threatened to remove its search engine from the country, and Facebook has said it could block Australian users from posting or sharing news links if proposed norms on royalty payments are rolled out. Representatives of both tech majors were appearing at a Senate hearing in Canberra on Friday.

The showdown is being closely watched by regulators and digital platforms across geographies. Policymakers in India have so far focussed on the dominance of intermediaries such as Google and Facebook, which are positioned in a way that service providers cannot reach customers except through these platforms.

The issues being thrashed out in Australia and elsewhere could have broader implications for the regulation of the digital economy in India in the longer term. A substantial discussion on the impact of intermediary platforms on the health of news media outlets is yet to commence in any meaningful way here.

According to a FICCI-EY report on India’s media and entertainment sector for 2020, there are 300 million users of online news sites, portals and aggregators in the country — making up approximately 46 per cent of Internet users and 77 per cent of smartphone users in India at the end of 2019. With 282 million unique visitors, India is the world’s second largest online news consuming nation after China.

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Paying for news feed by itself appears to be less of an issue for the tech giants, given that Google entered a new agreement to pay news publications in France just hours before threatening to remove its search functions in Australia. The showdown in Australia seems centered rather, on how much control these companies would get to retain on their payout process – operational aspects such as deciding the quantum of payments for news feed sources, and having to reveal changes in their algorithms. Hefty fines proposed by Canberra are being seen as an added disincentive.

The argument made by the companies in the Senate hearings is that the media industry is already benefiting from traffic being routed to them by each of the digital platforms, and that the new rules proposed by the Australian authorities would expose them to “unmanageable levels of financial and operational risk.”

The fundamental difference in the approach taken by the French and Spanish authorities on the issue is that they’ve specifically linked payments to copyright, without putting a forcing device into the agreements. Australia’s code is almost entirely focussed on bargaining power of news outlets vis-a-vis the tech majors, and has some coercive features as well. Australian regulators had initially proposed a voluntary code of conduct, but have since stepped up pressure citing the “unequal bargaining position” between news media outlets and tech platforms that could prevent the code from getting implemented on a voluntary basis.

In a statement earlier this week, Google said its new platform News Showcase, which is made up of story panels that give participating publishers the ability to package the stories that appear within Google’s news products, now has on board over 450 publications across a dozen countries. These include Le Monde, Le Figaro, and Libération in France; El Cronista and La Gaceta in Argentina; TAG24 and Sachsische Zeitung in Germany; and Jornal do Commercio, a newspaper from Pernambuco in Brazil. In December, the company announced it would “soon start offering people access to paywalled content in partnership with select news publishers”. The company had said it would pay participating partners to provide limited access to paywalled content for News Showcase users.

In India, digital advertising spends in 2019 grew 24 per cent year-on-year to Rs 27,900 crore, according to EY estimates, and are expected to further grow to Rs 51,340 crore by 2022. Globally, Facebook and Google together command 61 per cent of the market share in digital ad spends, according to Edelweiss Research; Google leads with a 37 per cent market share.

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In a separate note, Edelweiss said that it expected digital spends to be further accelerated led by a substantial jump in online activity further accentuated by Covid-19.

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