Japan FTC: Low Fees Paid by News Portals Could Violate Law

Yomiuri Shimbun file photo
The Fair Trade Commission / The Public Prosecutors Office. in Chiyoda-ku, Tokyo, Japan, February 6, 2022.

Yahoo Japan Corp., which operates the Yahoo News portal website, may have a “superior bargaining position” with regard to news content provided by media operators, according to a Japan Fair Trade Commission report issued Thursday.

The commission’s market study report on news content distribution examined the state of transactions between news media operators and IT giants such as Yahoo Japan and Google Inc. of the United States. The report pointed out that such firms may run the risk of violating the Antimonopoly Law if they pay media outlets “remarkably low” fees for their articles.

News portal websites earn advertising revenue by aggregating articles from news media operators to boost the number of people viewing their website. There is deep-rooted malcontent among the media operators over the level of fees — effectively usage payments — that they receive. According to a questionnaire conducted by the JFTC, 63% of news media operators said they were “dissatisfied” with the current amount paid to them.

In fiscal 2021, the average fee per 1,000 page views paid to news media operators for using their articles by six companies operating portals such as Yahoo and Line News was ¥124. Of these six companies, the highest fee paid was ¥251 and the lowest was ¥49 — a fivefold disparity.

The JFTC hopes revealing details of these fees will support future negotiations between the news media operators and the portal site operators.

The report also found that about 60% of these media news organizations said Yahoo News was the portal that paid the highest fees for article usage. As a result, the commission stated that Yahoo could have a “superior bargaining position” in its relationship with the media news operators.

The report added that the possibility of other news portal operators also having a superior bargaining position in individual business relationships “cannot be ruled out.” The commission said there are concerns that an operator who exploits a superior position, such as by unilaterally setting a low fee, could violate the Antimonopoly Law.

The report also found that consumers frequently use the Google search engine when looking for news articles online. Given that portion of news contents are used when these search results are displayed, the commission “encouraged” internet search operators and news media operators “to reach a common understanding on how news content should be used … including the setting of trade terms on compensation … through sufficient negotiations between them.”

In a statement, Japan Newspaper Publishers & Editors Association head Shiro Nakamura, who also is president of The Asahi Shimbun Co., called on platform operators to “sincerely” deal with these issues to optimize their transactions and relationships with news media operators.