The UK Competition and Markets Authority (CMA) and telecoms regulator (Ofcom) recently published a joint paper setting out their advice to the Department for Culture, Media and Sport (DCMS) on new rules for digital platforms’ use of publishers’ content. The DCMS asked the CMA and Ofcom to consider how the UK government’s proposals for a new ‘pro-competition regime for digital markets’ (to be enforced by the Digital Markets Unit (DMU) within the CMA) might apply to the relationship between platforms deemed to have “strategic market status” (SMS) and publishers. This development comes further to the 2019 Cairncross Review into the future of journalism, and comments from the Culture Secretary, Nadine Dorries, suggesting that the UK may follow Australia in implementing legislation relating to platforms’ use of publishers’ content, which Ms. Dorries referred to as “Australia Plus Plus”.
The advice is not limited to digital platforms’ conduct in relation to news publishers, but anticipates rules potentially applying to platforms dealings with all content providers. The ambit of the proposals is therefore potentially broader than developments in other jurisdictions, for example Australia (where the relevant legislation applies to platforms and news media companies) or France (where the Autorité de la Concurrence’s competition case relates to a unique French copyright law). That said, news publishers are the clear focus of the paper and highlighted as allegedly “particularly affected” by current arrangements.
The CMA/Ofcom advice does not contain substantive findings as to digital firms’ practices vis-a-vis publishers, although it acknowledges concerns raised by publishers and makes a series of assumptions in considering whether and what interventions may be required. It also makes several comments on the relationship between platforms and publishers, including in relation to the fairness of the value exchange. For example, it suggests that digital platforms are “must-have partners” resulting in an “imbalance in bargaining power in negotiations”, albeit it does not engage in any analysis on these points.
The paper makes three principal proposals to address publishers’ concerns, although it acknowledges that the complaints must first be verified – and the parties consulted — before any regulatory action is taken:
- Payment for content. The paper acknowledges that under existing arrangements, when platforms show content, “value is created for both the platform and the content provider”, including platforms driving demand for publishers’ websites through clicks. It speculates, though, that “where platforms have strong bargaining power, it is likely that they will capture a large proportion of [the] joint value”. But the paper does not include any investigation of the relative value gained by publishers and platforms from showing news content.The paper comments that the ‘fair trading’ principle under the new digital competition regime should require platforms to give publishers “fair and reasonable compensation for their content”. The report suggests several different methods for the parties to calculate a fair value exchange, with the onus on the SMS firm to justify it. The paper also proposes a “backstop” if no agreement is reached. This proposal is not explored in detail, but the paper expresses a preference for a final offer arbitration mechanism, similar to that used in the Australian News Media Bargaining Code.
- Algorithm transparency. The paper comments that algorithms are “essential to organising the content that users see”, and can “dramatically” affect traffic and revenue generation. It states that the “complexity and lack of transparency” of algorithms can create issues for publishers and “exacerbate the market power” of platforms.To address these issues, the paper proposes: (i) equal treatment rules requiring platforms’ algorithms not to discriminate between publishers unless there are objective reasons for doing so; (ii) increased transparency through platforms providing clear and accessible information to publishers on how algorithms impact the discoverability of content; and (iii) platforms implementing clear processes for deciding whether any changes to algorithms are needed, as well as giving appropriate notice of any changes to publishers.
- Access to data and content presentation. The paper claims that platforms have a “significant data advantage” over publishers, as a result of the greater opportunities they have to track and collect data across the online ecosystem. The paper theorises that platforms should be required only to collect data “reasonably linked” to the service they provide, but it does not explain what this means . It also suggests that platforms should be required to allow publishers to present content in their preferred web format, so that they are given sufficient attribution and users are able to navigate to the publishers’ sites without friction.
The new ‘pro-competition’ regime for digital firms in the UK is unlikely to come into force before 2023/2024 at the earliest, as the Government indicated in the Queen’s Speech in May 2022 that only a draft bill would be published in the 2022/2023 Parliamentary session. The legislation will be subject to debate in both houses of Parliament, and multiple amendments are expected. New rules regarding platforms and publishers are therefore not yet imminent.
However, the CMA/Ofcom advice will likely further stimulate the debate as to both the validity of publishers’ concerns and the most effective way to address them. The pace of the legislative timetable provides both sides with opportunity to influence the scope and requirements of any reforms ultimately enacted, and continued wrangling over what, if any, changes are needed is to be expected.
Tech firms are likely to maintain that the existing value exchange is fair, with content providers benefitting from substantial click traffic through their content being listed on a platform. Global news media organisations, however, will look to wield their influence over policymakers to push for changes to the status quo.
 The government’s response to the consultation on the proposed new regime were published on the same day as the CMA/Ofcom advice. See further UK Government Confirms Plans for Digital Markets Regulatory Regime | Cleary Antitrust Watch, May 6, 2022.
 See Cairncross Review: A Sustainable Future for Journalism, February 12, 2019.
 See ACCC, News media bargaining code, March 19, 2021.
 See further The Paris Court of Appeals Confirms the French Competition Authority Decision Imposing Interim Measures on Google to Protect Copyright Related Rights of Online News Publishers| Cleary Antitrust Watch, October 8, 2020.
 See Cleary Gottlieb, UK Government Confirms Plans for Digital Markets Regulatory Regime (May 10, 2022), and Queen’s Speech 2022, background briefing notes, May 10, 2022.