Investigate online ad market to save UK journalism, Cairncross review warns

Report calls for CMA to investigate online ad market, which is dominated by Google and Facebook.

The UK competition watchdog should investigate the online advertising market to ensure fair trading practices, a government report has warned.

The Cairncross Review into the future of the UK news industry, published today, also called for new codes of conduct among a slew of recommendations to safeguard the future of the press.

The report has been welcomed by the PPA and the News Media Association, both of which backed a recommendation for the government to provide tax relief for online news publications in the form of zero VAT.

Thousands of editorial jobs have disappeared in the past decade as news organisations transitioned to an online publishing model and the report seeks to ensure online platforms have a "news quality obligation" to improve trust with readers.

Dame Frances Cairncross, a former senior editor at The Economist and economics columnist for The Guardian, was tasked by prime minister Theresa May last year to investigate the sustainability of producing high-quality journalism in the UK. 

The key recommendations are:

  • New codes of conduct to rebalance the relationship between publishers and online platforms
  • The Competition & Markets Authority should investigate the online advertising market to ensure fair competition
  • Online platforms' efforts to improve users' news experience should be placed under regulatory supervision
  • Ofcom should explore the market impact of BBC News and whether it inappropriately steps into areas better served by commercial news providers
  • The BBC should do more to help local publishers and think further about how its news provision can act as a complement to commercial news
  • An independent institute should be created to ensure the future provision of public interest news
  • A new innovation fund should be launched with the aim to improve the supply of public-interest news
  • New forms of tax reliefs to encourage payments for online news content and support local and investigative journalism
  • Expand financial support for local news by extending the BBC’s Local Democracy Reporting Service
  • Develop a media literacy strategy alongside Ofcom, industry and stakeholders

In response, culture secretary Jeremy Wright is writing to the CMA, Ofcom and the chair of the Charity Commission to open discussions about how to implement Cairncross’ recommendations.

Wright said: "A healthy democracy needs high-quality journalism to thrive and this report sets out the challenges to putting our news media on a stronger and more sustainable footing, in the face of changing technology and rising disinformation. There are some things we can take action on immediately, while others will need further careful consideration with stakeholders on the best way forward."

The review includes a report called Online Advertising in the UK, which points out that Facebook and Google are estimated to have accounted for more than half (54%) of UK online ad revenues in 2017.

Google's vice-president of news, Richard Gingras, said: "We are committed to supporting vibrant and sustainable quality journalism, directing our users to news websites more than 10 billion times a month and sharing more than 70% of any revenue generated from our ad technology with news publishers.

"We have worked closely with the Cairncross inquiry and look forward to discussing the proposals further to ensure sustainable, high-quality journalism in the UK."

An estimated average of £0.62 of every £1 spent on programmatic advertising goes to the publisher – although this can range from £0.43 to £0.72, the report also found. Meanwhile, print ad revenues have dropped by more than two-thirds in the 10 years to 2017, last year’s Mediatique report for the Department for Digital, Culture, Media & Sport found.

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