Taking on digital media behemoths

Utusan Melayu had to be closed down in October 2019 and its revival only has one seventh of its previous editorial team (pic: Muhd Amin Naharul /TMR)

Many Malaysian media corporations have closed down while these digital platforms thrive without paying a single sen for content

THE US’ Department of Justice (DoJ) had its watershed moment on Jan 24, filing a long-awaited lawsuit against Google LLC, accusing the world search engine of illegally monopolising the online advertisement market.

The antitrust suit brought by the DoJ together with eight US states, accuses Google of pursuing anti-competitive conduct that restricts rival technologies, manipulates auction mechanics and insulates itself from competitors.

The 140-page suit asserted that Google made acquisitions to boost its advertising division and control the digital ad ecosystem that effectively forced advertisers and publishers with no other choice but to use its products.

The legal battle will be no easy feat as the original disruptor has always been at the pinnacle of the web industry, a search engine so mighty — with a 92% market share of web searches — that it is now actually a verb for online search.

By default, Google is naturally a digital ad powerhouse, contributing most of the profit of its parent to establish Alphabet Inc as the fourth most profitable company in the world with US$76 billion (RM332.88 billion) last year. It took 30 cents to every dollar that was spent by US advertisers in 2022.

The DoJ said it was largely due to Google’s technological control of the ecosystem resulting in advertisers paying more and publishers making less money.

Analysts and observers remarked that the legal battle will be long and protracted as the burden will be on the accusers to convince the judges that Google’s alleged violations are bad for consumers, not only rivals.

Many have tried to take on the world’s digital oligopoly for various reasons. Some have failed miserably — cases of German news publisher, Axel Springer, trying to block Google from benefitting freely from its news snippets; and Spain, trying to force the search engine to pay for news in 2014, which resulted in the country being blocked, come to mind.

Some have actually succeeded.

The best example would be Australia who, in 2020 and 2021, persevered throughout a digital threat by Google and Facebook, another global digital media platform, to finally enact a news media bargaining code. This forced both giants to compensate the Australian news industry for helping them attract eyeballs.

The code hasn’t actually been utilised, but functions as a loaded gun. Both Google and Facebook have been making private deals with the Australian news corporations since, knowing that its trigger could well be both costlier and more difficult to handle.

Since then, media organisations from other countries, in collaboration with their respective governments, have expressed interest to pursue the same path — France, Canada and New Zealand being the notable ones.

Malaysia is not an exception. In the past 15 years, the local media industry has lost billions to Google and Facebook. Digital ad spending has surpassed traditional advertisements since 2020. Last year, it recorded a high of RM3.48 billion, or more than 61% of total advertising expenditure, with the bulk of it, arguably ended up at Google and Facebook.

Both platforms have undoubtedly benefitted from the local free-news-sharing environment and the eyeballs it assures, putting the local news media to the sword. The situation is aggravated by the apathy of certain local advertisers, including government-linked companies, who were relishing the relatively cheaper digital medium, turning a blind eye to the cost of content acquisition and credibility.

Most media corporations in the country have either closed down or taken a different form in a spiralling slump, while these digital platforms thrive without having to pay a single sen for content.

The Utusan Melayu group, one of the oldest, pre-independence newspapers in the country, closed down in October 2019, rendering its 1,400 odd workforce jobless. It took a leaner form to operate Utusan Malaysia and Kosmo! brands since then, with only one seventh of its previous editorial team.

The Media Prima group had been laying off staff since 2018, and by end 2021 was left with a little over a quarter of its original 3,867 employees. Vernacular newspaper Tamil Nesan closed down in 2019, while The Malay Mail ceased printing in 2018.

The disruption has undoubtedly caused numerous pains and sacrificed livelihoods, and yet no one has really challenged the position of these digital platforms.

Taking cue from the DoJ initiative, perhaps the Malaysian Competition Commission (MyCC) or the Communications Ministry would like to take the lead, strike while it’s still hot?

So. Google anyone?