Now tech giants Google and Facebook may be forced to pay newspapers for their stories 

Tech giants such as Google and Facebook will be required to pay newspapers and other media outlets for using their stories, under new laws being drawn up by the Government.

Under the plans, which are modelled on a system that has been introduced in Australia, the platforms will be encouraged to negotiate payment deals with news organisations. If the negotiations fail, an independent arbitrator would set a fair price.

The move, being driven by Culture Secretary Nadine Dorries, comes amid growing concerns that the tech companies are dominating online advertising, to the detriment of consumers and businesses. 

The new regime will be regulated by the Digital Markets Unit (DMU), the digital watchdog that was set up within the Competition and Markets Authority (CMA) to rein in the power of the tech platforms.

The unit will also investigate the algorithms used by search engines such as Google, which many news organisations believe are manipulated to disproportionately direct search enquiries towards Left-leaning news organisations, and filter how people read and access news, to the detriment of quality, paid-for journalism.

A source in the Department for Digital, Culture, Media and Sport said that the planned regime was ‘pro-competition’ and ‘supports the sustainability of the press’. The source said: ‘The new regime will be an important vehicle to tackle the imbalance of power between the largest platforms and publishers.

‘The measures would give publishers greater transparency over the algorithms that drive traffic and revenue, more control over the presentation and branding of their content, as well as greater access to data on how users interact with their content.’

The source added the plans would also ‘help to redress the imbalance of bargaining power in determining fair payment for content’, which by ‘opening up the online advertising market to competition could also see longer-term benefits for publishers’, and that legislation would be introduced ‘as soon as parliamentary time allows’. 

Ms Dorries has told her officials that the DMU should be given ‘robust powers’ to ‘drive fair terms between publishers and platforms’ by introducing a binding arbitration, and be ‘explicitly granted new powers to act swiftly and effectively where the regulator finds that a platform has not offered fair and reasonable remuneration for its use of publisher content’.

Google and Facebook took about four-fifths of the £14 billion spent on digital advertising in the UK in 2019, while national and local newspapers took less than four per cent. Google charges between 30 and 40 per cent more for search advertising on desktop and mobile devices than Bing, its closest rival.

The DMU is also being given powers to levy large fines on online companies to prevent customers or companies from being treated unfairly and to make firms give smaller rivals access to their vast troves of data.

Facebook argues that it already helps to support UK publishers by paying tens of millions of pounds to national and local outlets to be part of Facebook News, and as part of the Community News Project, which funds 80 trainee reporters in newsrooms across the country.