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Google & Meta’s Ad Revenue Costs Publishers $21.9B, Study Says

A new study released by Columbia University found Google and Meta owe a minimum of $21.9 billion yearly to news channels to account for the ad revenue generated by their search traffic.

The amount was a “conservative” estimate, say researchers, who say that Facebook should compensate publishers $2.9 billion to use their content, while Google should pay around $15.6 to $18.8 billion yearly.

Calculations were based on their aggregate advertising revenue, equalling 6.6% of Meta’s profits and 17.5% of Google Search’s earnings.

“We find overwhelming evidence that the value of news is being appropriated by Google and Meta in excess of long-standing norms of how jointly created surplus value should be shared,” researchers shared.

The study was released at a time when other countries are looking into passing legislation that would force Big Tech companies to share earnings with publishers.

In 2021, Australia became a trailblazer when it passed a law making tech companies negotiate content agreements with publishers.

California followed suit when lawmakers voted to instate the California Journalism Preservation Act, which would demand “online platforms” to pay a “journalism usage fee” to outlets whose content exists on their platforms.

Over in Canada, Meta reacted to a similar law by removing news content from its platforms.

Back in the U.S., a bipartisan group of American lawmakers drafted the Journalism Competition & Preservation Act, granting news publishers to negotiate with Big Tech firms to use their content collectively.

Within the study, the academics analysed “recent agreements between news outlets and Google and Meta (previously known as Facebook), as well as with a database of licensing agreements made over recent decades for similar content-based products.”

The researchers shared that with these agreements, a 50% share would be an industry norm “fair revenue split” between the tech platforms and publishers.

According to Rod Sims, the former Australian Competition and Consumer Commission chairman, the study was “timely and very helpful.”

“It is clear on its assumptions and methodology, and so can promote a well-informed debate on what Google and Meta owe publishers for their news media content. Their approach is logical,” he said. “The debate is no longer over whether the platforms should pay, but about how much. This paper is an extremely thoughtful contribution to this debate.”

Google spokeswoman Jenn Crider disagreed and asserted that the study was “based on inaccurate assumptions, debunked data, and basic errors, in support of a biased conclusion.”

“In reality, less than 2% of all Searches are news related, and we don’t run ads or make money on the vast majority of them,” Crider said.

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