The story so far: Australia is working on a law that aims to make internet platforms Google and Facebook pay news media companies to display their content and link to their content. Following the publication of its draft last year, Facebook said such a law could require it to block Australian news content on its feed. Last week, just over a month after Australia introduced the legislation to Parliament, Google announced that it would shut down its search engine there if the law became a reality, prompting Prime Minister Scott Morrison to say, “We don’t respond to threats.”
What is the basis of this law?
The general idea has been around for a few years now. In its 2019 report, Digital platforms survey, the Australian Competition and Consumer Commission (ACCC), the country’s competition regulator, noted that there is a fundamental imbalance in power between news media and internet platforms. Specifically mentioning Google and Facebook, the report states that these platforms have “substantial bargaining power compared to many news media companies.”
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Very few platforms have the billion user base or the financial strength of a Google or a Facebook. On the other side, there are millions of individual publishers, none of which live up to the scale of the best tech platforms.
He also pointed out that media regulations barely apply to platforms, although they increasingly play the same role as the media. The past two decades have also seen the tremendous rise of platforms and the sharp decline of traditional news media, which provide the background for the report.
The Australian government, which reportedly felt how important it was to have a strong and independent media environment in a democracy, asked the ACCC to present a draft code, which it did last July. After some changes, the Bill amending the laws on the Treasury (compulsory trading code for news media and digital platforms) was introduced in December 2020. The biggest players in the news media industry in Australia, including News Corp and Rupert Murdoch’s Nine Network, have fought for such a law.
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How does the bill seek to correct the imbalance?
What is proposed is a mandatory mechanism, under which news media companies will be able to negotiate with Facebook and Google regarding payment for their content. If the parties – digital platforms and news media – fail to reach a negotiated agreement on compensation, an arbitral panel “will choose between two final offers made by the negotiating parties.” In addition, the bill provides for 14 days’ notice that platforms must give publishers regarding any changes in their algorithms. This is important because changes in platform algorithms have a significant impact on the referral traffic that publishers receive and therefore affect their business.
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Isn’t that a drastic change from the way platforms have worked with publishers?
Yes. It is one of those rare interventions by a government in publisher-platform relations. Platforms perform an important function in a digital world filled with an unimaginable amount of content and information, and in which there is an endless stream of new content every second. They help users discover the contents of this vast pile of information, either through search or through a friend’s feed, for example. This is also why publishers need platforms. For many news posts, even well established ones, Google and Facebook are the source of a large chunk of their traffic.
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Posts often worry about doing well on Google and Facebook. They also care about keeping pace with algorithmic changes. But the publisher-platform relationship has rarely been about the money. It has almost always been about tools and strategies to make publishers do well on platforms.
What is Google’s position?
Google is not only against the idea of paying for links, but also criticizes the arbitrage proposals and algorithmic changes. In his blog, Google said: “Right now, no website or search engine in Australia pays to connect people to other sites through links … The Code undermines one of the key principles of the open Internet that people use it every day. ” Moreover, he does not accept the allegation that he is responsible for the decline in newspaper revenues.
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Stopping its search engine in Australia is a real option because Google has taken such a step in the past. In 2014, Google shut down its press service in Spain, when the government introduced a law requiring it to pay a license fee for using news content. Google closed its Chinese search engine in 2010. In France, the law forced it to enter into agreements with publishers. EU copyright rules, to which France has given force, “allow publishers to charge a royalty from online platforms broadcasting extracts of their news,” said a Reuters report. It is not known on what basis the remuneration was calculated.
Google came up with a different solution. It goes by the name, Google News Showcase, a licensing deal with publishers around the world, on which he plans to spend $ 1 billion globally over the next three years.