New UK rules to cut digital platforms’ bargaining power

The UK government is planning to introduce new powers aimed at curbing the bargaining powers of digital giants such as Google, Amazon and Samsung over broadcasters.

In what will amount to the most far-reaching reforms, the government wants to protect the presence and prominence of public service media on smart TVs, the Financial Times reports.

The details

• New broadcasting rules will guarantee the prominence of public service media (PSM) such as the BBC, ITV and Channel 4, on smart TVs. 
• The measures are based on suggestions from the broadcast regulator Ofcom, details of which are due to be published next month. Ofcom is expected to support the government in using powers to arbitrate where a broadcaster can’t agree terms with a platform over prominence, access to viewer data or commercial payments.
• The legislation will contain stringent enforcement powers effectively making it mandatory for PSM apps and content to be given prime position on all streaming interfaces. 
• Google, owners of YouTube, which has hosted 8.7 billion views of UK public service broadcasters, argues extending the prominence rules to YouTube would “make little sense from either a commercial or public interest point of view”. And Samsung has warned that such rules will raise costs in the UK, stifling innovation, and perhaps increase prices for consumers.

Implications

• The planned reforms should mean the UK will not need to adopt US-style distribution terms, where providers such as Roku and Amazon can demand up to 30% of a broadcaster’s ad revenue in exchange for being present on a smart TV.
• While Amazon, Google, or television makers such as Samsung have been unable to insist on terms like these in the UK, broadcasters reportedly say negotiations with the digital giants and TV manufacturers are already getting tougher. Ofcom has noted that TVs manufactured by LG last year carried no PSB streaming apps. Reforms to ensure prominence for PSM were first mooted in 2019 by Ofcom as it became obvious existing rules covering traditional TV were out of sync with new technologies and the habits of viewers.

Key quote

“Prominence isn’t enough on its own if global platforms can use their financial muscle to squeeze the value out of PSM investments. Regulation must guarantee us the opportunity to negotiate deals that fairly reflect the value of our risky investment in UK content” – Submission to Ofcom from ITV

Sourced from the Financial Times, Ofcom