Google’s good growth rekindles publishers’ demand for higher share in ad revenue

Google India’s financial results for FY22, in which the tech giant reported nearly 80% growth in gross advertising revenue at Rs 25,000 crore from over Rs 13,900 crore in FY21, has energized the entire digital media ecosystem.

Digital news publishers, who are major stakeholders in the ecosystem and have been demanding a fair share in Google's ad revenue for a long time, now have their fingers crossed. Their hopes to get a higher share have revived.

At present, Google, claim publishers, gives a small share of what it earns from advertisements, which they feel is grossly unfair considering their contribution in fuelling Google's advertising and search business. The Digital News Publishers Association (DNPA) had even approached fair trade regulator Competition Commission of India (CCI) a year ago accusing Google of denying publishers of what they deserve. The case is still under CCI consideration. 

'How can a distributor keep the entire profit?'

Digital News Publishers claim that they deserve a major share of the ad revenue as they believe Google is merely a “distributor” of news while they are the “producers” who spend money and resources in creating content.

“Google is like Walmart or Amazon of news. It must keep a 10-15% cut and the rest of the ad revenue should be distributed among digital news producers just like Amazon and Walmart do with the sellers. At present, it's the exact opposite,” a news publisher alleged.

Abhishek Karnani, Director of the English Daily Free Press Journal, echoes the sentiments. “Google is a service provider in India. Hence it must share with the Indian publishing houses a fair percentage of revenues garnered from content, both video and text. It must act the same way as news platforms which pay the content source a transparent share of related revenues.”

“Ideally the fair share should be offered by Google on its own without pressure. It's a pity that Google has not done this yet in India. Google talks a lot about fair play, transparency and openness but does quite the opposite when it comes to content providers in India,” Karnani alleges. 

He adds that the Indian media has been quite vibrant but can do much more if fair practices are introduced in such relationships.

Google’s response

Responding to the allegations, Google India has said when publishers choose to use our advertising services, they keep a significant majority of the revenue that’s generated.

How much does Google earn from news?

The publishers also seek clarity on Google’s ad revenue from news sites as they accused the tech giant of opaqueness on this matter.

Digital head of a leading English daily claimed, “We don’t even know how much Google is earning from the news sites by selling ads and via search. The 10-15% which we get is also based on assumption. Publishers across the world struggle to negotiate with the giant because they have little information to determine how much they should be earning due to a lack of transparency.”

Hope CCI order will come soon: DNPA

Sujata Gupta, Secretary General, DNPA said, “DNPA is not against any big tech but expects to have a fair share of revenues from them on the content that belongs to us.”

Countries after countries are realizing this and their policy makers or agencies concerned are coming out with rulings or measures that are bringing some relief to the original content creators in the media. We believe the CCI will come out with relevant action soon in this regard, she shares. 

Some publishers say that the government has been so far reluctant about the issue even as many members of parliament have made a representation before the government. 

The DNPA case

The DNPA had said in its complaint to the CCI, “Google is denying publishers their fair share of revenue by parting only 10-15% of the digital advertising revenue with the news websites. This too has to be shared between digital assets of traditional media and the digital native news publications,”

DNPA had alleged more than 50 per cent of the total traffic on the news websites is routed through Google and being the dominant player, Google, by way of its algorithms, determines which news website gets discovered via search.

It had further alleged that Google was the major stakeholder in the digital advertising space and it unilaterally decides the amount to be paid to the publishers for the content created by them, as well as the terms on which the aforesaid amounts have to be paid.

It claimed that the members of the association have to suffer a loss of advertising revenues and the inability to bargain a fair share in the value chain of news dissemination, despite working and generating credible news.

It said that there was a lack of transparency in online digital advertising intermediation services, which makes it difficult for publishers to audit and verify the ad revenue generated on their websites.

CCI in January this year had ordered a probe against Google for its alleged abuse of dominant position after finding the charges “prima facie true”.

"In a well-functioning democracy, the critical role played by news media cannot be undermined, and it needs to be ensured that digital gatekeeper firms do not abuse their dominant position to harm the competitive process of determining a fair distribution of revenue amongst all stakeholders," CCI said in an order.

The Commission was of a prima facie view that Google had violated provisions of Section 4 of the Competition Act, 2002 which pertains to abuse of dominant position.

Publishers argued that it was not only a violation of the Competition Act, 2002 but also a violation of the Constitution of India, as the consumers have the right to access credible news.

It is noteworthy that CCI has recently imposed a penalty of more than Rs 1,370 crores on Google recently for its alleged unfair practices in the android mobile system abusing its dominant position. Another Rs 935 crore penalty was levied on Google for allegedly abusing its dominant position in relation to its Play Store policies as well.

DNPA members hope for a similar order in their case as well.