• by Ray Schultz , Columnist, November 12, 2023

Facebook and Google owe billions to U.S. publishers for using their content, according to Paying for News: What Google and Facebook Owe U.S. Publishers, a recent academic study. 

To get the suspense out of the way, here’s the tab: For Facebook it is $1.9 billion in annual compensation, and for Google $10-12 billion, the paper conservatively estimates.

Payments to publishers “have been well below accepted industry norms thus far, and there is considerable room for improvement in this regard,” the authors write. 

They add, “Whether this will happen directly as a result of new legislation or as a result of equitable bargaining outcomes between publishers and platforms remains to be seen.”

The authors note that governments around the world are pressing Google and Meta to pay for “the news they disseminate.” 

In response, they add, “Google and Meta have said they will withdraw from news and that disseminating news is not essential for their business. Indeed, publishers note that ‘referral traffic’ from the platforms to their news sites has fallen in the last year.”

The paper does not estimate how much Google would owe Gannett, say, if it loses the current lawsuit filed by Gannett. But based on “existing platform-publisher agreements around the world, we find that a fair revenue split would give news publishers 50% of news-related revenue earned by Google and Facebook,” it states. 

That may not be likely, given the pressures worldwide. But under Australia’s News Media Bargaining Code, to take but one example, the estimated payout to Australian publishers has been about AU$200 million (approximately US$140 million) per year, with small as well as large outlets benefiting from the new legislation. 

The study's conclusion? “The decades of underpayment from platforms to news publishers have helped boost profits for Google and Facebook and increase their respective market (and monopoly) power.”

The authors are Haaris Mateen, of the University of Houston; Anya Schiffrin of Columbia University; and Patrick Holder and Haris Tabakovic of the Brattle Group.