As the world turns its attention to recover from the Coronavirus, a revolution in the way we consume information is taking place in Australia. Scott Morrison’s government passed the News Media and Digital Platforms Mandatory Bargaining Code Bill, which mandates Google and Facebook to pay publishers for the news content they display on their platforms. With a series of private agreements, backroom deals and threats of total shutdowns, the Australian conundrum seems to have been quelled . However, its aftershocks are being felt across democracies that are now confident in their efforts to rein in the ‘Big Boys’.
The ‘Land Down Under’ woke up on the 17th of February to find their facebook feeds devoid of news. News ranging from updates from prominent media houses and politicians to COVID-19 updates and emergency reporting on forest fires were all erased from the face of the platform. Australian media outlets were blocked from the rest of the world on Facebook. Australia had been “Zucked” and “Unfriended” by the technology giant.
The Facebook shutdown came in days after Prime Minister Scott Morison’s government’s introduction of the News Media and Digital Platforms Mandatory Bargaining Code Bill 2020, which mandates a bargaining code that aims to force Google and Facebook to compensate media companies for using their content. The Bill comes into force on the recommendation of an 18 month long study by the Australian Competition and Consumer Commission (ACCC) called the Digital Platforms Inquiry, which not only established the asymmetrical relationships that the Tech Giants held in the Australian market as compared to their counterpart media houses but also claimed that for every 100 A$ spent on online advertising, 53 A$ goes to Google, 28 A$ to Facebook and the remaining 19 A$ is scrambled between the media industry ranging from giant media houses to independent journalists.
The ACCC report also claimed that 39% of Australians use Facebook for general news, and 49% use Facebook for news about COVID-19. The report also warned that users are “extensively tracked” by Google and Facebook not only within their platforms but even on unrelated third party operators. The ACCC employed privacy firm AppCensus found that Google’s third-party digital trackers were on more than 80 per cent of the most popular websites, while Facebook’s trackers were found on more than 40 per cent, followed by Amazon and Microsoft.
The Bill itself, emerging out of this report, begins with the goal of situating digital media in the same realm of regulation as print media based on the observation of a “tremendous rise of the platforms and sharp decline of the traditional news media.” The Australian government’s belief in a free press as a crucial element of Australian democracy has been the foundation stone of this new bill. After some minor amendments to timelines the Bill was introduced in December 2020 as the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill. The Bill lays down that Google and Facebook will have to compensate news outlets and journalists for using their content on their platform to target their users. The Government has given the Tech Giants time of two months to mediate transparent commercial deals in order to determine the compensation that shall be paid to media houses, failing which a “Final offer” arbitration would take place wherein the arbitrator shall decide the appropriate compensation amount.
The Bill sparked reports of a Google shut down that gripped the ‘Aussies’ in the latter half of January, however, Google remained restrained in the negotiations with the Australian Government. The Google reply, led by Mel Silva, claimed that the media industry already benefited from traffic routed to them by the digital platforms, and that the proposed rules would expose the Internet companies to “unmanageable levels of financial and operational risk.” She also highlighted that Australia may lose its ‘Googling Privileges’, if the bill were to become a law. With the news of a Google withdrawal in the picture, Microsoft endorsed the new Bills claiming that their search engine ‘Bing’ stood for the values upheld by the Australian government. Satya Nadela did engage in a conversation with Morrison to highlight the significance of public interest journalism and the case of Bing-driven Australia. However, Google’s claims of “breaking the search engine” and “a fair and freer code” seemed to have receded to the background as they entered into a deal with Seven West Media and Nine Entertainment for Google’s newest project, ‘News Showcase’.
Hours before the deal however, Google also entered into a deal with Media publications in France worth over $76 million over three years. The French case comes out of a year-long copyright spat. The agreement between Google and the Alliance de la presse d’information générale (APIG), a lobby group representing most major French publishers has infuriated several outlets claiming the deal was “opaque and unfair”. The publishers that are a part of this deal will also come under Google News Showcase. French publishers claim that the immense pressure from shareholders to enter the project forced several media houses to enter into the opaque deal, which does not specify how the amounts would be distributed between the publishing firms with fees as high as $1.3 million for France’s reference daily, Le Monde, to $13,741 for local publisher La Voix de la Haute Marne. It is worth noting that the French case arises from copyright payments (after the European Union’s overhaul of its copyright laws in 2019) without enforcement instruments while the Australian Bill is almost entirely focused on the bargaining power of news outlets vis-à-vis the tech majors, and has some coercive features as well.
Unlike Google, Facebook’s ambush sent the Australian Parliament in a frenzy with leaders such as Greg Hunt calling it an “assault on Freedom of the sovereign” and a “unforgivable abuse of power”. However, days after the shutdown Facebook too found itself joining hands, much like its counterpart, with Schwartz Media, Solstice Media and Crikey publisher Private Media, as they began to release news content for their Australian users.
Internationally, Britain, France and India supported Morrison’s bid to rein in the Big Tech giants in their battle with the Federal government. The anxiety associated with the non-accountability of Big tech in democracies and free markets has sparked deliberations world wide ranging from Facebook’s unfair monopoly and the subsequent antitrust hearings to calls for content regulation across social media and OTT platforms. The United States erred on the side of caution whilst dealing with the Australian government and pushed for a voluntary code rather than one based on coercion. The anxiety surrounding the law’s curbs on the free market were evident in the US approach to the Bill as American lawmakers argued that such a law would endanger Australia’s international trade obligations. Canada, on the other hand, has supported the Morrisson government’s approach in this battle of news publishers vs Big Tech news aggregators, and has promised to follow a similar approach locally. In India, in line with the events in Australia, the Indian Newspaper Society (INS) has made a demand of 85% in shared ad revenue to Google. The INS also pushed for greater transparency in revenue reports provided to publishers from Google.
So who won the battle? Well, the answer to that question gets even murkier. It is evident that the system of ad-revenue from third party content providers is broken and needs considerable reform. Across the world there seems to be a revolution to counter the opaque ad-revenue models followed by Big tech companies following the legislations passed in the EU and Australia. The ACCC has also stated that this law would perhaps be just the start of a range of reforms undertaken by the Australian government to increase accountability of Google and Facebook. If one were to examine the merits of these laws, there are considerable boons to the media industry, the state and democracy in general with high quality, fact checked news services and a unique ad revenue distribution model. The laws have most definitely fixed a leaking pipe in the system by ending the regime of unfair advertising revenue generation through third party content on these platforms. A user shall now get credible, fact-checked news (which is expensive) on their searches and feeds to provide timely and accurate information.
On the business end of things, the financial models of media houses which were severely pressed with the rise of digital media seem to have got some respite with another source of revenue associated with traffic coming from Google and Facebook. On the other hand, the deals that Facebook and Google have managed to make independently with large media houses has sparked fear of the rise of a new digital media monopolies wherein only the news publishers that enter into such deals will be able to generate traffic from Google and Facebook’s users while others shall be sidelined. There is also considerable criticism regarding the revenue distribution model that these platforms will follow as seen in the case of France, where media houses still have no information about how their revenue from Google is calculated and no idea of the ad revenue Google generates with their content. The deals arising from these legislations , drawn on the pretext of a “free press”, may also spell the end for small publishing houses and independent journalists, who do not hold a seat at the negotiating table.
The ‘Aussie’ revolution has definitely perturbed Big Tech executives and has shattered the myth of their invincibility. The legislation has raised eyebrows in boardrooms and instilled confidence in governments and media houses to get their ‘share of the pie’, however, how big this piece really is and who gets to finally devour it is still uncertain.
Ishaan Khosla is a final year student of Politics and International Relations at Ashoka University.