Analyzing the Role of Competition Law in the Newspaper Industry of India

[Sumati is a student at Jindal Global Law School.]

A well-functioning democracy is dependent on information wherein legacy media like newspapers play an imperative role. The newspaper industry contains the elements of a perfect competitive market structure. However, with the emergence of digitalization, the Indian newspaper industry is posed with the competitive challenge of retaining their traditional print product. In this article, the author analyzes the newspaper industry of India from the lens of competition law to unravel the challenges and opportunities affecting newspapers in adapting to the dynamic environment.    

An Overview of the Indian Newspaper Industry 

The newspaper industry is one of the oldest and influential media in the Indian history. Newspapers are all around us and is a need of everyone. Newspapers provide news in every domain such as politics, entertainment, sports, lifestyle, business, law, medicine, technology.  The Times of India ranks as the top brand of newspapers in India followed by Hindustan Times and The Hindu. 

From competition perspective, prices have a tremendous impact on performance of newspaper organizations. The prices include subscription, advertisement, and newsprint. The World Economic Forum’s Value in Media Project highlighted that Indian consumers are likely to subscribe to paid news services amongst other services. However, when it comes to newspapers, the expensive subscription fee and free accessibility to online content deters Indian consumers from taking print newspapers. 

Newspaper circulation has drastically reduced. The average daily circulation for Hindi and vernacular newspapers fell by 20% in 2022 and English circulation fell by 40% as compared to levels in 2019. However, the print version of newspapers is substitutable by the e-version of newspapers which can be accessed using website/app.  

The newspaper industry is constantly undergoing transformation due to digitalization and changing consumer habits. Community building, revenue diversification, bundled offerings along with creation of content using AI are some of the ways adopted by newspapers to compete with digital media.  

The Market Definition

The Competition Commission of India (CCI) is the antitrust regulator dealing with general market of ‘commodities and services’ of private nature. News is a public good which comes under the marketplace of ideas. Section 2(r) of the Competition Act 2002 (Act) stipulates relevant market containing two dimensions: product and geographic market. 

News refers to content produced by news organizations employing services of professionals who regularly produce and disseminate journalistic work under their own editorial workflows, standards, and responsibilities. News content is diverse and vast. However, for competition law, the relevant product market for newspapers is the News and Current Affairs genre which is inclusive of business, financial news and information disseminated through extensive research and editorial checks. General Entertainment is excluded as it is informal, indirect and involves authenticity issues. 

The legacy newspaper organizations in India have catered to the needs of the readers acquainted in different languages. Thus, language is set as the defining criteria of relevant geographic market pertaining to newspapers. But with the advent of digital news media, newspapers are exposed to the same market forces which affects digital news. Therefore, a conclusive market definition is required. 

Impact of Dominant Players on Competition

The Press Council of India is an independent regulator of print media and is established under a statue. Although it takes suo moto cognizance of unethical conduct by newspapers and journalists, yet it lacks punitive powers. Additionally, it lacks jurisdiction on restricting ownership. The Council is hence, rendered inefficient, powerless, and ineffective to deal with issues concerning newspaper industry.  

With multiple newspaper publishers in India, the tendency of concentration of ownership appears to be concealed. At the national level, these four dailies occupy three-fourth quarters of Hindi readership in India - Times Group, HT Media Ltd, The Hindu Group and Network18.

Interestingly, digital media poses competitive challenges for newspapers. Google, in its capacity as an international non-news player, is dominating by reducing the number of newspaper players in the market. In 2021, it launched the Google News Showcase in India wherein Google entered into agreements with 30 Indian publishers for sharing their content. The Showcase features news in 8 languages and has reduced subscription of newspapers. 

For newspaper organizations, advertising accounts for two-third of their total revenue. It has been observed that there has been fierce competition from tech companies which have wide audience reach and low rates induced by economies of scale for digital advertising. 

Digital advertising has adversely impacted newspapers which is illustrated by the case of Digital News Publishers Association v. Alphabet Incorporation. The Digital News Publishers Association approached the CCI under Section 19 (1)(a) of the Act alleging that Google has abused its dominant position by imposing unilateral and arbitrary conditions on publishers which leads to unfair compensation to the publishers for the content. This is detrimental to fair share in the advertising revenue. CCI through its Director General will probe into the matter.

Why Does Newspaper Industry Not Act Anti-Competitively?

Newspapers is a part of media which is considered as the fourth pillar of democracy in India. Newspapers have played a pivotal role since our freedom struggle days. At present, newspapers are devoted towards upholding integrity which is imperative for democratic accountability. 

Indians consider newspapers as the most reliable and trustworthy source of authentic news. The value attributed to newspapers acts as an incentive for the entities to not indulge in anti-competitive conduct which will otherwise dampen consumer confidence. 

The ‘citizen welfare’ standard supporting media plurality increases news diversity and assists in avoiding concentration of media ownership. Furthermore, tax benefits in the form of subsidies to newspapers for reducing distribution costs and increasing circulation boosts their morale of participating fairly in the market. 

Why Competition Law Matters for Newspaper Industry?

Historically, terms like news, news organization and journalist are deprived of legislative definition which poses difficulty in solving competition issues aroused by reporting cases against social media, citizen journalism, live-blogging, etc.

Newspapers have existed before digitalization hit and so it holds a unique place in our lives. However, now that consumers are getting attuned to the benefits and ease of accessing news over digital mediums, newspapers are losing their viability. 

In 2023, the Press and Registration of Periodicals Bill was passed replacing the Press and Registration of Books Act 1867. Remarkably, the Bill was found to have adverse implications on press freedom as it widens the powers of the state to have more intrusive and arbitrary checks. India ranked 151/180 in the World Press Freedom Index this year. “The violence against journalists, the politically partisan media and the concentration of media ownership all demonstrate that press freedom is in crisis in “the world’s largest democracy”. 

The remark might have made you feel dejected, however, from the perspective of competition law, the concerns affecting newspaper industry must be addressed to make press freedom reign in the democracy of India.  

Newspapers versus digital platforms

Newspapers are continuously facing competition from digital platforms which have attracted the support of consumers. For instance, the news consumption pattern in India is seeing an upward trend in the use of domestic digital-born brands like the Quint and Scroll. Smartphones orient digital news to consumers which poses challenges for the newspapers in retaining their identity. This has pressurized the newspaper organizations to revamp their business models by leaning towards digital modes.  

Fake news 

Newspapers are characterized as epitome of authentic news as they enable readers to discern the truthfulness of news.  However, a pressing concern for them is the distribution of news content via digital media. The spread of fake news is facilitated by digital news as it is not vetted and leads to social, political and cultural harm. This is an alarming public concern. Newspapers have to compete against the challenges posed by the digital distribution of news. 

Increasing concentration

The increased concentration of dominant players reduces the sources available to the public for availing news which undermines the perspectives rendered to the consumers and eventually affects public debates. 

Conclusion

News performs a social function which will never come to an end. Katharine Viner, the editor-in-chief of The Guardian, remarked that “completeness is newspapers’ strength. Once something is published, it cannot be changed unlike in television or digital platforms.” Although there are various mediums of disseminating news, the newspaper industry is unparalleled and unique. The article concludes that there is uncertainty whether the print media for news would survive, but credibility has not been lost which encourages the newspaper publishers to strive amidst the digital challenges.