Allegations against Google over Revenue Sharing

What is the issue?

The Competition Commission of India (CCI) has ordered a probe against Google for alleged unfair revenue sharing terms with regard to news content.

What is the case about?

The News Broadcasters and Digital Associations (NBDA) has filed a complaint against Google’s parent entities under the Competition Act, 2002.
Compensation- The central contestation is that the Google has not compensated news publishers for their contribution to its platforms.
News content- The NBDA has alleged that its members are forced to provide their news content to Google in order to prioritise their web links in the search engine result page.
Dominance- Owing to the tech-giant’s dominance in the space, the publishers were forced to integrate content on their platforms.
They have to trade in the company’s exchanges and use its buying tool, Google Ads/DV 360, to receive bids from advertisers.
Accelerated Mobile Pages- Google has been accused of forcing members into using their Accelerated Mobile Pages (AMP) or building mirror-like light-weight webpages.
Incompliance may affect the members’ placements in mobile search.
Paywall options- The tech giant restricted paywall options unless publishers rebuild their websites as per AMP standards.
Header bidding- The search-engine operator has also been accused of encouraging members to disable header bidding.

The Competition Act, 2002 and the 2007 amendment prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A).

How is the current situation?

Google’s stand- According to Google, the revenues accrued are spent towards defraying the costs of maintaining data centres, technological investments, enabling innovations and maximising advertiser return on investment.
CCI’s direction- The CCI has ordered the Director General (DG), its probe arm, to club the matters and submit a consolidated investigation report.

Why is Google dominant?

Market share- As per the NBDA, Google’s search engine commands a 94% market share in the country.
Online proliferation- It holds significance with the increased transition toward online news consumption (inclusive of app-based consumption).
With online proliferation, there is an increased reliance of news publishers on digital ad revenues, and in turn, tech-based companies.
Traffic- More than half of the total traffic on news websites is routed through Google.
Prioritizing the search queries- Readers would more often opt for an online web search rather than reaching out to a specific news website by typing its URL in a browser.
Since the search engine determines which news websites would be prioritised in search queries, it has become the first port of call for information online.

What is happening outside India?

Europe- In 2022, an anti-trust complaint was filed against Google with the European Commission, challenging its ad tech stranglehold over press publishers.
Australia- Australia introduced the ‘Media Bargaining Code’ that requires news outlets to negotiate commercial deals with Facebook and Google with violations calling for civil penalties of up to $10 million.
USA- The US court has allowed a larger anti-trust case against Google that alleges that the tech giant monopolized the ad-tech market and suppressed competition by its access to data.
Canada- The Canadian government tabled legislation that aims to introduce transparency in sharing of revenue between digital news publishers and intermediary platforms such as Google.

References

Quick facts

Header bidding

It refers to a programmatic bidding process that unifies multiple exchanges for a single bidding event.

Paywall

A paywall is a revenue strategy where several sections or the entire website is placed behind a wall.
To bypass the wall the readers are prompted to register themselves for a paid subscription.

The Competition Commission of India (CCI)

The Competition Commission of India has been established by the Central Government with effect from 14th October 2003.
CCI is a statutory body responsible for enforcing The Competition Act throughout India.
The CCI consists of a Chairperson and 6 Members appointed by the Central Government.
Functions- It is the duty of the Commission to
- Eliminate practices having adverse effect on competition
- Promote and sustain competition
- Protect the interests of consumers
- Ensure freedom of trade in the markets of India
- Give opinion on competition issues
- Undertake competition advocacy
- Create public awareness
- Impart training on competition issues

The News Broadcasters & Digital Association (NBDA)

Formerly known as News Broadcasters Association (NBA)
It represents the private television news, current affairs and digital broadcasters.
It is the collective voice of the news, current affairs and digital broadcasters in India.
Members- Presently 26 leading news and current affairs broadcasters.
It is an organization funded entirely by its members.
The NBDA presents a unified and credible voice before the Government, on matters that affect the growing industry.