The story so far: Australia is working on a law that seeks to make Internet platforms Google and Facebook pay news media companies for displaying their content as well as linking to their content. Following the publication of its draft, last year, Facebook said such a law could force it to block Australian news content on its feed. Last week, just over a month after Australia introduced the legislation in Parliament, Google said it will shut down its search engine there if the law becomes a reality, prompting Prime Minister Scott Morrison to say, “We don’t respond to threats.”
What is the basis for this law?
The broad idea has been around for a few years now. In its 2019 report, Digital Platforms Inquiry, the Australian Competition and Consumer Commission (ACCC), the country’s competition regulator, noted that there was a fundamental imbalance in the power between news media and internet platforms. Specifically mentioning Google and Facebook, the report said these platforms had “substantial bargaining power in relation to many news media businesses.”
Very few platforms have the billion-plus-user base or the financial strength of a Google or Facebook. On the other side are millions of individual publishers, none close to being any match for the scale of the top tech platforms.
It also highlighted that media regulation hardly applied to platforms, though they have been increasingly playing much the same role as the media. The last two decades have also seen the tremendous rise of the platforms and sharp decline of the traditional news media, which forms the context in the report.
The Australian government, reportedly sensing how important it was to have a strong and independent media environment in a democracy, asked the ACCC to come up with a draft code, which it did last July. After some changes, the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill was introduced in December 2020. The biggest players in Australia’s news media business, including Rupert Murdoch’s News Corp and Nine Network, have batted for such a law.
How does the Bill seek to correct the imbalance?
What is being proposed is a mandatory mechanism, under which news media companies will get to negotiate with Facebook and Google regarding payment for their content. If parties – digital platforms and news media – cannot arrive at a negotiated agreement about remuneration, an arbitral panel “will select between two final offers made by the bargaining parties.” Further, the Bill provides for a 14-day notice that platforms need to give publishers regarding any change in their algorithms. This is important because changes in platform algorithms have a significant impact on the referral traffic that publishers receive, and consequently affects their business.
Isn’t this a drastic departure from how platforms have worked with publishers?
Yes. This is one of those rare interventions by a government in publisher-platform relationships. Platforms perform an important function in a digital world that is filled with an unimaginably huge amount of content and information, and into which there is an unceasing flow of new content every second. They help users discover content in this vast information heap, either by way of search or via a friend’s feed, for instance. This is also why publishers need platforms. For many news publications, even well-established ones, Google and Facebook are the source of much of their traffic.
Publications often worry about faring well on Google and Facebook. They also worry about keeping pace with algorithmic changes. But the publisher-platform relationship has rarely ever been about money. It has almost always been about tools and strategies for publishers to fare well on the platforms.
What is Google’s stand?
Google is not just against the idea of paying for the links but is also critical of the proposals on arbitration and algorithmic changes. In its blog, Google has 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 people use every day.” Further, it does not agree to the allegation that it is responsible for the decline in newspaper revenue.
Shutting down its search engine in Australia is a real option because Google has taken such a step in the past. In 2014, Google shut its News Service in Spain, when the government introduced a law to make it pay a licence fee to use news content. Google shut down its Chinese search engine in 2010. In France, it has been forced by law to strike deals with publishers. The EU copyright rules, which France has given force to, “allow publishers to demand a fee from online platforms showing extracts of their news,” says a Reuters report. It isn’t clear on what basis the remuneration has been calculated.
Google has proposed a different solution. It goes by the name, Google News Showcase, a licensing arrangement with publishers across the world, toward which it plans to spend $1 billion globally in the next three years.