Google, Meta Dodge UK’s Plan to Force Fairer Deals With Publishers

The United Kingdom was about to join a list of countries including Australia, Canada, France and Spain that imposed limits on the negotiations between Big Tech firms and publishers to use news and content on tech platforms, but a change of heart in the U.K. government may delay this plan at least for a year.

On Friday (May 6), the telecommunication regulator Ofcom and the Competition and Markets Authority (CMA) published their joint advice to the U.K. government on how Big Tech companies should arrange “fairer deals” with online publishers in order to use their content.

As in many other countries around the world, people have turned to online sources for their news, either through social media, search engines or apps provided by Google and Facebook, among other tech firms. Ofcom and CMA argue that “consumers and content providers, including newspapers, could benefit if the bargaining power of the biggest tech firms is properly managed.”

The advice was set out in the form of a code of conduct that would mean that Big Tech firms with significant bargaining power would have to agree fair and reasonable terms for the content they use on their platforms. This code identifies a number of ways to do that, such as by addressing concerns about how algorithms work, and which factors are used to determine where different publisher’s content appears in searches, or by providing a framework for fair financial terms for the publisher’s content.

The code would also establish that in the event of a dispute between a platform and a publisher about the application of a code, the Digital Markets Unit (DMU) would have the role of deciding whether a contract or action by the firm was compliant. As proposed in other countries, the code would also give the DMU enforcement power to impose binding arbitration to ensure code breaches do not persist for long periods.

Notably, the U.K. law would differ from other countries because the code would be a set of legally binding obligations for the biggest tech firms. Additionally, unlike Australia, the proposal in the U.K. has a broader focus: it was intended to shape the behavior of the Big Tech companies and reduce the imbalance of bargaining power across a range of digital markets.

However, the biggest challenge was that the new code had to first be passed into law. The government would also have had to legally authorize the DMU to be fully operational and with statutory powers.

According to current news reports, U.K. ministers said neither the code nor the DMU will be part of the Queen’s Speech to be delivered Tuesday (May 10), when Queen Elizabeth will announce new laws for the next Parliamentary session. This means that while regulators can still work on a draft for the code and the DMU will continue assisting the CMA in existing investigations, the chances of publishing a legally binding code by the end of the year are slim. Accordingly, at present Google and Meta may not need to worry about legal restrictions when negotiating with publishers.

Government Response

The same day that the regulators published their advice, the Secretary of State for Digital, Culture, Media and Sport and the Secretary of State for Business, Energy and Industrial Strategy also presented to Parliament the reasons why they should count on the DMU, but just not yet.

According to the ministers, the U.K. has an opportunity to take its own “proportionate, pro-innovation approach” to regulate digital markets. “Compared to other emerging international regulatory regimes, we are building a more flexible and targeted regime that can better support innovation,” the ministers said in a statement.

The ministers agree with the regulators that the DMU is necessary, and they will provide the new body with the necessary enforcement powers. However, new rules in this space could affect the government’s plan to be seen as “boldly pro-tech,” and the proposal may be delayed until the next Parliamentary session in 2023.

Read more: UK Tech Regulator Warns of High Cost of Internet Bill Compliance for Small Business