Big Tech like Google Profits and the Value of News on Digital Platforms

The question of the value of Google and meta news content on social media, search engines, and other digital platforms that aggregate headlines and snippets without requiring users to click through to full stories is central to recent initiatives worldwide, including Canada, aimed at ensuring that Big Tech companies compensate news organizations for their content. While companies like Google and Meta (formerly Facebook) focus on click-through rates and the traffic they provide to publishers, they often overlook the broader impact of news content on their platforms.

A recent study conducted by FehrAdvice and Partners AG, under the oversight of leading academics and on behalf of the Swiss Media publishers’ association, sheds light on the value of news content on the Google search engine, which generates a significant portion of Google’s annual revenue. The study, conducted in Switzerland, assessed the impact of journalistic content on user behavior and satisfaction, estimating that media content contributes to approximately US$440 million in annual revenue from Google searches.

The study reveals that if Google faced strong competition in web search, fair compensation for the value of media content would amount to about 40% of its total revenue, or approximately US$175 million per year in Switzerland alone.

The Swiss government is exploring ancillary copyright or licensing approaches similar to the EU and Australia, seeking to quantify the value of news before implementing new regulations. Participants in the study were assigned to groups with and without journalistic content during searches, demonstrating the positive effect of such content on user satisfaction and success rates.

While platforms like Google and Meta have curated news content without compensating publishers, these companies argue that news comprises a small fraction of their platforms and that users are not highly interested in news. However, the Fehr study indicates that news results constitute between 16% and 40% of Google search outcomes.

As Google and Meta resist regulatory efforts globally and threaten to cut off news access, the study challenges their perspective and highlights the role of news content in enhancing user experience and platform utility. Policymakers must develop a nuanced understanding of news’s true value to tech giants and ensure fair compensation, especially as artificial intelligence increasingly relies on news data for data sets and training models.

With numerous countries considering regulations for Big Tech compensation to news outlets, the study underscores the need for more research in different markets to establish fair compensation frameworks and support journalism’s role in democracy and AI development.

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