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Tech giants might have to share ad revenue with Indian publishers soon!

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The Indian government is planning to pass a law to make tech giants like Google and Facebook share a part of their ad revenue with local Indian publishers as well as digital publishers for using their original content. Rajeev Chandrasekhar, minister of state for IT and electronics, is mulling a revision in IT laws to effect this change.

The digital platforms that thrive on content have achieved massive growth and profit. In addition, they managed to grab advertising revenues as well as viewership. Newspapers and digital news publishers claim that this growth has been fuelled by the original content churned out by them.

While speaking to TOI, Chandrasekhar said, “The market power on digital advertising that is currently being exercised by the Big Tech majors, which places Indian media companies at a position of disadvantage, is an issue that is seriously being examined in the context of new legalizations and rules.”

The center believes that the growth of social media and tech platforms has only benefited a handful of big tech companies, not the original content creators. “The news publishers have no negotiating leverage at all, and this needs to be tackled legislatively. This is an important issue for us,” added Chandrasekhar.

The new law will make it mandatory for companies such as Microsoft, Apple, Twitter, and Amazon to pay digital news publishers a share of the revenue earned via using their original content.

Apparently, the move comes after countries including Australia, Canada, France, and Spain passed legislation that requires tech companies, including Google, to adequately pay content producers for using their content and search results. In Germany, France, and some other European nations, Google has already signed deals to pay more than 300 publishers for using their content on its platform. Australia last year made such payments mandatory, while Canada introduced similar legislation in April.

Reportedly, Amazon, Google, and Meta doubled their share of ad revenues over the last 5 years outside of China. In the US, this saw Google, Facebook, and Amazon control 64.1% of the advertising market.

Earlier, the Indian Newspaper Society (INS) and Digital News Publishers Association (DNPA) accused Google of having a very opaque advertising system, as they were unable to get details of Google’s advertising value chain. DNPA claims that more than 50 per cent of the traffic on news websites is routed through Google.

Following a complaint filed by the DNPA in January, the Competition Commission of India (CCI) ordered an investigation into Alphabet Inc, Google LLC, Google India, and Google Ireland for suspected misuse of dominant position in the digital advertising industry.