Ula Furgal and Magali Eben review the United Kingdom’s efforts to address the lopsided balance of power between traditional news media and digital platforms, embodied in the Cairncross recommendations and subsequent Digital Markets, Competition and Consumers Act. Although U.K. news media have met the Act with optimism, there remain reasons why the new payment and enforcement regime may prove to be less effective than promised.
In 2025, it seems almost trite to ask whether digital platforms have power in our democratic societies. The adoption of platform regulation across the globe illustrates the perceived outsized influence these companies have on what we buy, what we consume and, ultimately, how we think. Regulation of Google, Meta, X, Tencent and the like takes the form not only of economic measures, but also of interventions into online speech, children’s safety, dark patterns and exploitation of behavioural biases, showing how widespread the concern is about the impact of these companies on public opinion. Yet it was not that long ago that the protection of public discourse and democracy focused on the regulation of media conglomerates—not digital platforms.
There has clearly been a shift. Nowadays, many people access the news via digital platforms. The Office of Communications (Ofcom), the United Kingdom’s communications regulator, found that 59% of U.K. adults use online intermediaries to access news, with most getting their news from Facebook and Google Search, though TikTok is also on the rise. Google and Facebook are said to account for 40% of traffic to large publishers. The traditional advertising business model of news has become unsustainable. As the Competition and Markets Authority (CMA), the U.K.’s competition authority, noted in its market study on online platforms and digital advertising, platforms reap the bulk of advertising revenue (reducing the flow going to newspapers directly) while also being a key intermediary through which users access the news. Advertising has been the lifeblood of news publishing for centuries, alongside subscriptions, but those revenues are declining. In 2020 the CMA found that Google held more than 90% share of the search advertising market, and Facebook had over 50% of the display advertising market, resulting in their “capture [of] at least 35% of the value of advertising bought from newspapers and other content providers in the UK.” Consequently, the CMA indicated, news media’s ability to manage traffic to their websites and to target advertising needs to be addressed in order to contribute “to the sustainability of news media in the country.”
Codes of conduct for sustainable journalism
The U.K. was among the first countries to conduct an enquiry into the sustainability of high-quality journalism. The (unbalanced) relationship between press and digital platforms was one of two focus areas addressed by the so-called Cairncross review launched in 2018. The review recommended that platforms draw up codes of conduct to govern their behavior towards the press, which after the regulator’s approval, would provide a basis for individual negotiations. The code was not seen as a tool to oblige platforms to bargain with press for payments for the use of their content, but rather as a means for setting up a framework to support the press’ understanding of how platforms handle its content and give them due warning before the platforms make changes to their algorithms determining the display of the content.
While the government agreed with the Cairncross recommendation, it noted that the codes would only be a part of the wider approach to the “competition policy in digital platform markets,” since other platform users experience similar difficulties. Around the same time, the government announced its decision not to implement the European Union Directive on Copyright in the Digital Single Market (providing for a new neighboring right for press publishers), officially because the deadline for implementation fell after the Brexit date.
Since the Cairncross recommendation, the idea of “the code” has become ingrained in the U.K. discourse on the relationship between press and digital platforms. Although the code’s form or legal basis was initially unclear, the government’s outline of the new pro-competitive regime in November 2020 (providing the basis for the later DMCC Act) made it apparent that the code would be a part of the wider initiative to govern the behavior of platforms with strategic market status. While the concerns about sustainability of press were used to reinforce the need for government intervention, there was to be more than one code of conduct, to address the needs of more than one industry. The media industry was generally supportive of this approach. More explanation on how the code could work came in the joint advice of Ofcom and the Competition and Markets Authority, requested by and delivered to the government in November 2021.
According to the joint advice, the code would provide guidance on non-payment issues, such as algorithmic transparency and data sharing, as well as on publishers’ entitlement to receive fair, reasonable, and non-discriminatory (FRAND) remuneration for the use of their content. The guidance on the latter would go beyond high-level FRAND principles but leave it to the negotiating parties to set the exact methodology for calculating the remuneration. While the legal basis—for what is in fact licensing payments—would be copyright, the publishers were to receive a “fair split” of both direct and indirect platform revenues linked to the use of their content (joint value), with main categories of benefits outlined in the code. As a way of safeguarding interests of smaller publishers, the joint advice recommended that alongside the non-discrimination requirement, the joint value should be assessed not in reference to each publisher separately, but in relation to all content providers of a certain type. In case of disagreements between the parties, binding arbitration should be available.
The joint advice pre-dates the proposal for the Digital Markets, Competition and Consumers Act (DMCC), although it was adopted in anticipation of a more comprehensive digital markets regulation in the U.K. This regulation and the institutionalization of “the code” finally saw the light of the day when the DMCC Act was adopted in May 2024.
The news industry cheered when the DMCC Act finally became law. It was felt that the DMCC Act could be the answer to the plea of the press in the U.K. After all, platforms could now be held to account under a distinct regulatory framework—which even incorporates the possibility of imposing “fair and reasonable” payment terms. Yet, is the DMCC Act truly a panacea for all the ills which plague journalism in the U.K.?
Payment under the DMCC Act
The DMCC Act came into force on January 1, 2025. Since then, the CMA has been able to launch investigations to determine which companies have strategic market status in a specific digital activity. If a firm has substantial and entrenched market power and a position of strategic significance in respect of that digital activity, it will be designated as a firm with “Strategic Market Status” (SMS). Digital activities (the provision of services over the internet or of digital content) are covered by the DMCC Act where they have a relationship to the UK—most likely because the service is offered to a significant number of U.K.-based users. It seems evident that search engines, like Google Search, or social networks, such as Facebook, Instagram, TikTok and Twitter/X, are digital activities. What is not evident, however, is whether all will be designated as having Strategic Market Status.
Once a firm has been designated as an “SMS firm,” the CMA can impose conduct requirements. Conduct requirements can include obligations (for example, to trade on fair and reasonable terms) or prohibitions (for example, not to apply discriminatory terms).
Conduct requirements can be imposed where an SMS firm uses its position to exploit users or undermine fair competition, where doing so addresses one or more of the three objectives set out in the DMCC Act: “fair dealing,” “open choices,” and “trust and transparency.” The “fair dealing” objective in Section 19(6) of the DMCC Act entails that users—including business users, such as publishers—of the service should be treated fairly, and able to interact with the undertaking on reasonable terms. Under this objective, the CMA can oblige SMS firms to adopt fair and reasonable payment terms towards specific third parties. In theory, the CMA could adopt a conduct requirement which obliges Google or Facebook (or any other significant gateway to news and advertising) to provide reasonable and fair payment terms to those news publishers whose content they host. Indeed, it may be more than theory: in its Invitation to Comment on its initial investigation to designate Google as a firm with SMS, the CMA already teased that it could look into “the use of publisher content without fair terms and conditions (including payment terms)” during the next steps of setting conduct requirements.
Conduct requirements will only be imposed to the extent that they are proportionate (effective and not more onerous than necessary) to their intended aim. This aim will be a more specific iteration of one of the three objectives from the DMCC Act, such as “fair dealing.” To impose an obligation on platforms to agree on payment terms with news publishers would require a clear articulation of the goal that can be achieved by doing so, how it satisfies the interests of business users (the news publishers) but perhaps also consumers more widely. Since so many people access news through Google or Facebook, it may take a particularly savvy authority to assess how well a platform’s payment terms achieve the CMA’s intended aims.
These conduct requirements are not the end of the story: If an SMS firm fails to comply with its conduct requirements, the CMA can launch an investigation into this breach and impose enforcement orders. Where the obligation to agree payment terms is breached, the CMA can address it through its “final offer mechanism,” requiring each party to put forward binding final offers, among which the CMA can choose.
Partial answers to complex problems
In its Draft Guidance on the digital markets competition regime (under the DMCC Act) the CMA has made it clear that the decisions under the DMCC Act will be guided by its own Prioritisation Principles. Given its ultimately limited resources, the CMA must carefully consider not only which interventions are most aligned with its overall mission, but also whether it truly is best placed to act (which it is not if there is an appropriate alternative) and which interventions are most likely to have a positive impact. It must be asked, therefore, whether addressing the sustainability of the press is likely to be a CMA priority.
While press publishers could receive some payments through the enforcement of the DMCC Act, it remains an open question whether such intervention would address any of the press industry’s concerns in a meaningful way. Even if payments are secured under the DMCC Act, it is unclear how the CMA could ensure that the allocation of this revenue is spread across publishers in a way which does not further entrench big players and disadvantage smaller publishers. The uneven distribution of funds within the news sector and the ability of platforms to pick and choose their licensing partners have been one of the main concerns with competition law based bargaining frameworks. If plurality of the media is an important aim, flows of money from platforms to the news industry should benefit a variety of news outlets. At the same time, plurality of news outlets on the internet may not bear the same “quality” stamp as in traditional news publishing—which, anecdotally, the CMA seems aware of, since the joint advice excluded harmful content from remuneration.
Payment by platforms alone will not ensure the sustainability of news in the 21st century: the problems run deeper. The CMA argued that “a thriving and competitive market for independent news and journalism is essential for an effective democracy: if the sustainability of authoritative journalism is undermined, this is likely to worsen concerns around fake news and misleading information.” Although we agree that addressing the concentration of digital platforms in advertising can be part of the answer, its role should not be overstated. A piecemeal transfer of wealth from platforms to news publishers leaves a number of fundamental questions unanswered. First, would these monetary transfers benefit a diversity of news providers, with what consequences for plurality and quality of news? And how transparent would such transfers be? Secondly, could such payments further entrench the dependency of the press publishers on digital platforms, potentially affecting the types of content publishers produce and their distribution channels? Ultimately, the question is whether (re)directing money to the already-established publishers is the best way to secure the supply of high-quality journalism. Perhaps it is time to look for alternative models for news production and invest in media literacy to ensure a well-informed citizenry.
Authors’ Disclosures: The authors reports no conflicts of interest. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
