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Columbia University Study Suggests Google & Meta Should Pay News Outlets Billions in Ad Revenue

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Columbia University Study Suggests Google & Meta Should Pay News Outlets Billions in Ad Revenue

Edited by: TJVNews.com

A recent study from Columbia University’s Initiative for Policy Dialogue has proposed that Google and Meta (formerly Facebook) should collectively pay at least $14 billion per year to news outlets to compensate for the ad revenue generated by their search traffic, as was reported by the New York Post.  The study’s estimates, considered “conservative,” argue that these tech giants are appropriating the value of news content beyond established norms. The report in the Post also said that the figures, if implemented, could amount to 6.6% of Meta’s proceeds and 17.5% of Google Search’s proceeds.

The study contends that Facebook should pay publishers around $1.9 billion annually for the use of their content, while Google’s payment should fall within the range of $10 billion to $12 billion per year. As was noted in the Post report, researchers arrived at these figures based on their analysis of recent agreements between news outlets and the tech platforms, along with historical licensing agreements for similar content-based products. The study suggests that a 50% revenue split would constitute a fair industry norm between platforms and publishers, the Post report added.

“We find overwhelming evidence that the value of news is being appropriated by Google and Meta in excess of long-standing norms of how jointly created surplus value should be shared,” researchers said in the white paper, which was published by Columbia University’s Initiative for Policy Dialogue, according to the Post report.

This research surfaces at a time when regulatory pressure is mounting on major tech firms globally. Lawmakers in the US, Canada, and other countries are considering legislation that would mandate revenue-sharing with publishers, according to the Post. Australia passed such a law in 2021, and California lawmakers have proposed the California Journalism Preservation Act, which introduces a “journalism usage fee” for online platforms hosting news content.

Meta responded to these regulatory developments by removing news content from its platforms in Canada earlier this year. As was noted in the Post report, in response to the Columbia University study, Google spokesperson Jenn Crider disputed its findings, stating that the study is “based on inaccurate assumptions, debunked data, and basic errors, in support of a biased conclusion.” Crider argued that less than 2% of all searches are news-related, and Google provides substantial value to news publishers.

Rod Sims, the former chairman of the Australian Competition and Consumer Commission, praised the study, calling it “timely and very helpful,” the Post said. Sims highlighted the logical approach of the study, emphasizing that the debate has shifted from whether platforms should pay to determining the appropriate amount, the Post report added. The study aims to contribute to an informed discussion on the obligations of tech platforms towards news publishers.

As the regulatory landscape evolves, studies like the one from Columbia University add momentum to the ongoing debate surrounding the fair compensation of news outlets by major tech platforms, as was noted in the Post report. The proposed figures underscore the significant economic impact these platforms have on the news industry, sparking discussions about the need for equitable revenue-sharing arrangements.

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