Online tech giants should pay news providers to use their content under a "mandatory" code, as colleagues have called in a landmark new report.
It paints a worrying picture of a "fundamental power imbalance" between news publishers and platforms.
It did so when the government announced plans for a new competitive regime to curb the dominance of platforms like Google and Facebook.
Today's report by the Lords Communications Committee recommends adding a "Mandatory Code to Acquire News Bars" – based on an Australian model – in the government's Online Harms Bill.
This would force platforms to pay publishers for the right to use content.
Today's report by the Lords Communications Committee recommends adding a "Mandatory Code to Acquire News Bars" – based on an Australian model – in the government's Online Harms Bill (file photo).
The Australian proposals allow news publishers to bargain with the internet giants.
If the two parties cannot reach an agreement under this system, an “independent arbitrator” will choose which final offer is fairest.
Concerns have been raised that Google and Facebook may refuse to participate if a new code is not required.
The report also highlighted concerns about the way these dominant online platforms use their algorithms, and the editors were concerned that they would not be warned of changes.
There are also concerns about the way Google's algorithms decided on search rankings, with concerns that some publications take precedence over others.
The Lord's report states: “There is a fundamental power imbalance between news publishers and platforms.
& # 39; Because of their dominant position, Facebook and Google can determine the conditions under which they use the content of publishers.
"This includes whether and how much they pay for news that appear on their platform, which news sources rate their algorithms the highest, and how much attention they pay to the editors of changes to those algorithms."
It added, “Algorithms are a product of the human value judgments of their designers, but there is a lack of transparency about them and the possible prejudices of designers. We will explore this issue further in our next research on freedom of expression on the Internet. & # 39;
Concerns have been raised that Google and Facebook could refuse to participate if no new code were required (file photo)
The report went on to say, “The government should use the Online Damage Act to legislate for a mandatory code of communication negotiating, modeled on the proposal by the Australian Competition and Consumer Commission.
Once in place, the Digital Markets Unit should take responsibility for it and examine publishers' concerns about the way platforms use their content.
"The government and regulators should work closely with international partners on this matter."
The report called on the government to take action on the "dysfunctional" online advertising market that is crippling news organizations.
Lord Gilbert von Panteg, Chairman of the Communications and Digital Committee, said: "Online advertising is critical to the success of news publishers, but there is a fundamental imbalance between them and platforms like Facebook and Google, whose overwhelming dominance means they are dictating . " the terms on which they use the publishers' content, including whether and how much they pay for it. "
The newest news? The Future Of UK Journalism report also recommends Ofcom increasing powers to regulate the online news content of public service broadcasters that are currently outside its remit, as well as to ensure the accuracy and impartiality of their journalists' public social media contributions.
In the meantime, the BBC News website and app should have an aggregator section that links to articles on the websites of smaller and local news organizations.
The British watchdog will curtail the power of Google, Facebook and other technology giants to prevent them from abusing their dominant positions
Culture Secretary Oliver Dowden said: "I am outrageously pro-tech and digital platform services are transforming the economy and bringing tremendous benefits to businesses, consumers and society."
Britain is taking on Google, Facebook and other tech giants with the world's first watchdog to prevent them from abusing their dominant positions.
The Digital Markets Unit is given muscle to protect smaller businesses and ensure that consumers have more control over their online profiles.
While its exact scope has not yet been established, it may be able to impose large fines to keep customers or businesses from being treated unfairly and leading online companies to allow smaller competitors to access their huge amounts of data.
It can also be empowered to suspend, block, or even reverse decisions made by technology companies.
The unit, which will start operating in April, is expected to be fully operational in 2022. The legislation that will enable it to legally enforce its decisions is expected to be discussed at the next session of Parliament.
It will be part of the Competition and Markets Authority (CMA), which has called for greater powers after warning that Google and Facebook held "unassailable" positions in digital advertising and social networks that threatened fair competition.
The two companies control 80 percent of the UK digital ad market valued at £ 14 billion, according to the CMA, while Google controls 90 percent of the search market. But today the government will vow to allay regulator fears to ensure that "consumers and small businesses are not put at a disadvantage".
Ministers are particularly concerned that online platforms are abusing their dominance of the market to impose unfair terms and conditions on news publishers and threatening their ability to deliver high quality news to the public.
Culture Secretary Oliver Dowden said: “I am outrageously pro-tech and digital platform services are transforming the economy and bringing tremendous benefits to businesses, consumers and society.
However, there is a growing consensus in the UK and abroad that the concentration of power among a small number of tech companies is stifling the growth of the sector, reducing innovation and having a negative impact on the people and businesses that depend on them.
"It's time to look into it and usher in a new age of technological growth."
Business Secretary Alok Sharma added: & # 39; The dominance of a few big tech companies leads to less innovation, higher advertising prices and less choice and control for consumers.
"Our new pro-competitive regime for digital markets will ensure that consumers have choice and means that smaller businesses are not crowded out."
In a report in July, the CMA warned that Facebook and Google had become so dominant over digital advertising that rivals could not "compete on an equal footing".
The watchdog said the huge amounts of data being amassed by companies gave them an "unmatched" and growing advantage over competitors, while both of them constantly "nudge" people on their own behalf to gain control of even more data.
The advertisements warned that this dominance could force companies to pay more than they would have if there had been more competition. The CMA said this enabled Google and Facebook to generate a greater chunk of advertising revenue from newspaper publishers, who rely on the tech giants to attract visitors to their websites, making it difficult for them to survive.
Mr Dowden said a free press is "the cornerstone of democracy," adding, "As more news goes online, we want to make sure our world-famous publishers get a fair deal from the technology platforms so we can help build their longevity to ensure." -term sustainability. & # 39;
Andrea Coscelli, CMA executive director, said; "Only through a new pro-competitive regulatory system can we fight the market power of technology giants like Facebook and Google and ensure that businesses and consumers are protected."
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