Skip to main content

UH Finance Expert Estimates Tech Giants Google and Meta Owe News Publishers Billions of Dollars

By Bryan Luhn 713-743-0954

Person holding phone and tablet with website overlays giving the effect of online connectedness.

A University of Houston professor says in a new study that internet giants Google and Meta, parent company of Facebook, should pay news publishers billions of dollars for use of their content.

In a white paper published by Columbia University’s Institute for Policy Dialogue, Haaris Mateen, an assistant professor of finance in the C.T. Bauer College of Business, and his co-authors say Google should give publishers 17.5% of its search revenue annually, or roughly $10 billion. By those same calculations, Meta should pay 6.6% of its revenue, which is nearly $2 billion.

“Over the past 20 years, Google and Meta’s advertising revenues have soared while the ad income traditional media rely on to fund public-interest news and investigative journalism has declined,” Mateen said. “That is not an accident. Once people started consuming most of their news online, advertisers moved their money to those platforms.”

“While Google and Meta argue news publishers should be grateful their platforms drive traffic to their sites, our findings suggest otherwise,” he said.

Mateen and his co-authors looked at a large body of research in the economics of bargaining, recent agreements between news outlets and Google and Meta, as well as a database of licensing agreements made over recent decades for similar content-based products. They found 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 and suggested 50% would be a fair split.

“Our findings underscore the glaring disparity between what Google and Meta currently pay news publishers and what they would pay if they were not powerful monopolies,” Mateen said. “Our approach to determining fairer compensation is simple, transparent and compelling. Government officials are already incorporating it into policy discussions and publishers worldwide can use our work in their own negotiations.”

For years, big tech companies around the world have fought legislative efforts that would require them to share revenue more fairly with publishers. In 2021, Australia passed a law requiring tech firms to negotiate content deals with publishers. Canada followed suit leading Meta to pull news content from its platforms there. Indonesia just passed a presidential decree last week asking platforms to pay news publishers.

But a similar effort in the U.S., the bipartisan Journalism Competition and Preservation Act, is stalled in the Senate at a time when many news outlets are struggling to maintain staff and keep their doors open. Site visits, or clicks, aren’t generating enough revenue.

So, as the world awaits potential legislative fixes, Mateen and a colleague developed a web application called Paying for News which calculates fair payment based on a number of factors and helps publishers and governments in negotiations with tech firms.

“Regardless of how technology evolves, the basic principle underpinning the media system should remain the same: if you reap massive profits by using news content, you should pay for it,” he said.

Top Stories