Focus on Antitrust

Complements and/or Substitutes? The Competitive Dynamics Between News Publishers and Digital Platforms and What It Means for Competition Policy


Abstract


This paper analyses the competitive dynamics between news publishers and digital platforms. News publishers and digital platforms are vertical complements in that news publishers publish content that helps digital platforms to attract users, while digital platforms generate traffic for news publishers. News publishers and digital platforms also horizontally compete for user attention and advertising revenues. Internet users in search of news can go to the website of their favourite newspaper, but they may also go to Google News, Facebook or Twitter. Similarly, advertisers can spend their online advertising budget on news publishers, but also on Google or Facebook online properties.

Whether the relationship between news publishers and digital platforms is of a vertical or horizontal nature – or a combination of both – has implications for competition policy. From a vertical standpoint, some of Google and Facebook’s practices vis-à-vis news publishers could be exploitative in nature. Exploitative cases are, however, difficult to run and exploitation is not illegal in some jurisdictions. Thus, other avenues may need to be explored to counterbalance the digital platform’s market power and create a sustainable source of income for news publishers, such as, for instance, joint bargaining or the creation of collective licensing mechanisms for their rights.

From a horizontal standpoint, while digital platforms cannot be blamed for seeking to maximize their revenues, competition authorities should however prevent them from engaging in strategies that draw traffic away from news publishers and deprive them of advertising opportunities, either through self-preferencing, discrimination, the imposition of formats and standards that reduce the ability of news publishers to monetize their content, or by making it harder for them to access the data generated by the users’ interaction with their content.


Keywords


News publishers; newspapers; digital platforms; Google; Facebook; Twitter; online advertising; ad tech; competition; big data; joint negotiations; collective societies

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DOI: http://dx.doi.org/10.12870/iar-12885

References






Antitrust & Public Policies
ISSN: 2284-3272

Iscrizione al Tribunale di Roma n. 300, del 12 dicembre 2013, modificata con registrazione n. Reg. Certificati 216 bis/2019

Last issue published on December 30, 2019