Inter-ministerial meeting on revenue sharing by I&B ministry stays inconclusive

I&B secretary Sanjay Jaju said the meeting was not meant to arrive at solutions, but to understand the problems highlighted by the Digital News Publishers Association.

The first inter-ministerial meeting, convened by the Ministry of Information and Broadcasting (MIB) on Wednesday to discuss the imbalance in bargaining power between Big Tech companies and digital news publishers, and the dominance of the former in digital advertising, was inconclusive on whether a legal framework is required to address the issues, three people aware of the matter said.

The officials from Ministry of Corporate Affairs said that as of now, it is not clear whether the Digital Competition Bill that the MCA is currently working on can specifically address the issues of digital news publishers through a bargaining code.

The hour-long meeting, chaired by I&B secretary Sanjay Jaju, was attended by officials from ministries of I&B, electronics and information technology, and corporate affairs, and departments of economic affairs, promotion of industry and internal trade, and legal affairs. It was also attended by at least one official from the Competition Commission of India, the country’s antitrust regulator.

The three people cited above said that during the meeting, Jaju said this initial meeting was not meant to arrive at solutions but to understand the problems highlighted by the Digital News Publishers Association, an industry association whose members include HT Digital and Times Internet.

One person cited above said the officials concluded that they first need to establish and understand how digital advertising works, how publishers earn revenue, how publishers are losing revenue (if any) and how to quantify this loss, what interventions can actually work, and whether government intervention is actually required.

In the meeting, Jaju said that the digital publishers will be invited in the second round and digital advertisers such as Google and Meta in the third, the three people said. Dates for subsequent meetings have not been decided yet.

The meeting was held in response to a representation made by the DNPA to the MIB and the Prime Minister’s Office, in which it advocated for a revenue sharing mechanism with big tech companies such as Google and Meta, akin to Australia’s News Media Bargaining Code and Canada’s Online News Act.

The MCA official said the ministry had received comments on the Digital Competition Bill — whose consultation ended on May 15 — and was currently analysing them to amend the draft. The official said that it was not clear if something like the bargaining code could be included within the DCB.

Jaju also asked the MCA if issues raised by the DNPA could be addressed through subordinate legislation (rules and regulations) under the extant Competition Act or the new Digital Competition Bill.

In the meeting, three cases currently under investigation by the CCI were also discussed. In these now clubbed cases, the DNPA, the News Broadcasters and Digital Association, and the Indian Newspaper Society (of which HT is one of the fourteen founding members) had said that Google had violated its dominant position as a search engine. They had argued that Google ran different features on the search results page, such as snippets of news and news aggregation, all of which relied on news reported by news publishers. As a result, users no longer clicked on news publishers’ links and the publishers were thus deprived of crucial ad revenue. In the case of newspapers, the DNPA submitted that two thirds of newspapers’ revenues came from advertising while one third came from subscription services.

In all three cases, the CCI in January 2022 had prima facie concluded that Google was violating the Competition Act by abusing its dominant position in the “market for online general web search services” and “market for online search advertising services”, and that its conduct merited investigation. The regulator had also inferred that Google held a “significant position in the market for online digital advertising intermediation services”, an aspect it said it would investigate.

In Wednesday’s meeting, officials also discussed whether the business aspect of online advertising fell within MIB’s domain according to the Allocation of Business Rules. On July 28, 2023, the government amended the AoBR and brought online advertisements under the purview of MIB. Hindustan Times