1, December, 2023
HomeBusinessFair Share or Overreach? Assessing the News Revenue Dilemma for Google and Meta

Fair Share or Overreach? Assessing the News Revenue Dilemma for Google and Meta

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A recent study from Columbia University suggests that Google and Meta (formerly Facebook) should contribute a minimum of $14 billion annually to news publishers to reflect the ad revenue generated through their search traffic. The researchers propose a “conservative” estimate, asserting that Facebook should pay $1.9 billion yearly, while Google’s contribution should range between $10 billion and $12 billion.

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According to the study, these figures represent 6.6% of Meta’s total proceeds and 17.5% of Google Search’s proceeds, aligning with the researchers’ determination that the current appropriation of news value by these tech giants exceeds established norms.

The study emerges amidst ongoing resistance from major tech firms against legislative efforts in the US, Canada, and other nations seeking to compel them to share revenue with news publishers. The pressure intensified following Australia’s enactment of a law in 2021, mandating tech firms to negotiate content deals with publishers. California has also advanced legislation, and a bipartisan group of US lawmakers proposed the Journalism Competition & Preservation Act, allowing news publishers to collectively negotiate with tech giants.

The researchers based their findings on estimates of search revenue derived solely from news-related content on each platform. They scrutinized recent agreements between news outlets and Google/Meta, along with a database of licensing agreements spanning decades for similar content-based products. Concluding that a 50% share would be a fair revenue split, the study aims to fuel an informed debate on the extent of Google and Meta’s financial obligation to news publishers.

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Former chairman of the Australian Competition and Consumer Commission, Rod Sims, commended the study’s timing and clarity, stating it contributes to the ongoing debate on the appropriate compensation for news media content. Google, however, contested the study, claiming it is based on inaccurate assumptions and supports a biased conclusion, emphasizing that a minimal percentage of searches are news-related.

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