Digital Markets, Competition and Consumers Bill

Written evidence submitted by the Authors’ Licensing and Collecting Society (ALCS) (DMCCB42)

Executive Summary

· Authors’ Licensing and Collecting Society welcomes the Bill in its current form as an avenue for fair remuneration by giving big tech companies ‘SMS’ status and implementing the ‘final offer mechanism’ for third parties.

· In particular, ALCS believes the Bill within its current wording will help to level the playing field between writers and digital platforms, redressing issues of fair remuneration for writers through the collective bargaining model referenced by the CMA’s and Ofcom advice in May 2022 [1] .

1. Introduction

1.1. ALCS represents 120,000 writer members and we are responsible for paying out the secondary rights money authors are entitled to in exchange for uses of their works. We are making a submission to the Public Bill Committee in response to Part One of the DMCC Bill. Our members currently have their work used by digital platforms without adequate rights payment.

1.2. We believe the Bill, in its current form, has given the creative workforce the proper statutory avenue to negotiate fair remuneration for uses of works in the digital space. As a result, we would encourage parliamentarians to maintain the current wording of the section (Part 1, Chapter 3) that pertains to conduct requirements of digital platforms.

2. Background to the current digital platform market

2.1. Digital and online platforms are currently able to make considerable profits from the use of creators works while paying said creators a disproportionately low share of the revenue created.

2.2. ALCS has carried out reports into authors’ earnings [2] for the past decade which has mapped the changing environment as digital platforms have become significant market players. The average median earnings of writers have steadily declined over this time period from £12,330 in 2006 to £7000 in 2022 [3] . ALCS therefore believes this Bill through the ‘final offer mechanism’ can redress this drop in earnings due to the impact of platforms.

3. Digital Markets, Consumer and Competitions Bill

3.1. ALCS positively supports the statutory powers given to the Digital Markets Unit within Part 1 of the Bill. It gives individual and smaller organisations a legal framework to use when engaging in discussions with digital platforms.

3.2. Specifically, with firms who will be granted ‘Strategic Market Status’ under the terms of the DMCC Bill as previously there has been no legal incentive for these firms to enter into voluntary discussions around rightful remuneration for the works used on their platforms.

3.3. This is addressed in the specific wording of Part 1 of the Bill under Chapter 3 which states:

"(1) Where the CMA considers that the following three conditions are met in relation to a proposed transaction between a designated undertaking and a third party, the CMA may- (a) require the undertaking, and (b) invite the third party, 35 to submit to the CMA terms as to payment ("final offer payment terms") which the undertaking or, as the case may be, the third party regards as fair and reasonable for the transaction.

(2) The first condition is that the proposed transaction is a transaction in which the designated undertaking would- (a) provide goods or services to the third party, or (b) 5 acquire goods or services from, or use goods and services of, the third party."

3.4. ALCS believes the ‘final offer mechanism’ provides the appropriate support for third parties to engage in meaningful renegotiations with platforms for the uses of content.

4. Recommendations to the Committee

4.1. ALCS alongside other industry groups such as the National Union for Journalists, would like to encourage the Public Bill Committee to leave Part 1, Chapter 3 of the Bill unchanged.

4.2. Digital markets have presented a considerable change to the way in which creators works are used and how they are remunerated for that work. The DMCC Bill grants creators the statutory framework through the powers given to the DMU to support claims for rightful payment for use of work.

4.3. The DMU presents the government with the opportunity to give creators rights organisations an avenue to rebalance the way in which platforms work within the market and ensure we can continue to see a variety of writers create content that consumers want to see.

4.4. ALCS would like for the DMU to ensure that the ‘final offer mechanism’ is used appropriately and that rebalanced remuneration is distributed to the intended individual creators.

June 2023.