As an Australian Senate inquiry into a new News Media code gets under way, the tech giants are joined by the US government in raising concerns about the future of the internet should it be implemented. The move could see Google withdraw its Search engine entirely from the country.
The takeaways:
- Introduced by the Australian Competition and Consumer Commission (ACCC), The News Media and Digital Platforms Mandatory Bargaining Code could force tech giants like Facebook and Google to pay Australian publishers for linking to their content. The code was originally due to be finalised by November 2020.
- Google has threatened to remove its search engine from Australia should the code come into force. “We do not see a way, with the financial and operational risks, that we could continue to offer a service in Australia,” Google Australia managing director Mel Silva told the Australian Senate.
- The United States has put in a submission to the Australian parliamentary inquiry, arguing that the proposed legislation is “unreasonable, impractical, fundamentally imbalanced,” and could run counter to the US-Australia free trade agreement.
Get up to speed: The introduction of the code follows a 2019 inquiry in Australia that concluded Facebook and Google take a disproportionate share of online advertising revenue, despite large amounts of content coming from publishers and media organisations.
- Initially designed to address the loss of digital ad revenue from traditional media to platforms, the code would allow both individual and collective bargaining by Australian publishers to negotiate payment for displaying news content in Google Search, and on Facebook.
- Google spent a significant amount of effort last year lobbying against the code. “We are not against a law that governs the relationships between news businesses and digital platforms,” they claimed. “But the current draft Code is unworkable.”
- Facebook has threatened to block Australians from sharing news on Facebook and Instagram if the code comes into force. They argued that the competition regulator “misunderstands the dynamics of the internet,” and would damage the media companies it is trying to protect.
What does the US say?
The US has pointed out that the code is designed to exclusively target two US companies, and that the process for determining compensation was “fundamentally imbalanced”.
- A number of measures may also breach the Australia-United States Free Trade Agreement, including allowing an arbitrator to mandate remuneration, and requiring tech companies to provide data on users accessing news content.
- Direct intervention in the market to distribute advertising revenue is “extraordinary,” and “a significant step that needs to be carefully thought through and justified,” they said.
- The US wants the proposals shelved in favour of additional studies to identify specific market failures, and a voluntary code if necessary.
World Wide Web inventor Tim Berners-Lee has raised his own concerns this week that the code could fundamentally break the internet as we know it.
- “Specifically, I am concerned that the Code risks breaching a fundamental principle of the web by requiring payment for linking between certain content online,” he said in a submission to the Senate inquiry. “The ability to link freely — meaning without limitations regarding the content of the linked site and without monetary fees — is fundamental to how the web operates.”
It’s a small world: Elsewhere, Google and Facebook’s relationships with publishers is progressing a little more smoothly…for now.
- Google has just reached an agreement with L’Alliance de la Presse d’Information Générale – a group of French news publishers – about licensing news content after months of negotiations. The agreement covers the News Showcase, a new licensing program launched by Google in June last year.
- Facebook agreed a number of licensing deals with mainstream UK news outlets just before Christmas for its upcoming News section.
- However, government pressure is likely to hot up this year. The European Commission has revealed new rules to regulate Big Tech, including more stringent measures on customer data use and harmful content. And in the US, regulators are gearing up for a huge antitrust battle against Facebook.
What now? Submissions to the Senate committee have recently closed, and it is beginning to hold its first hearings.
- Australian Prime Minister Scott Morrison responded to Google’s announcement by accusing them of blackmail. “Let me be clear: Australia makes our rules for things you can do in Australia. That’s done in our parliament,” he said. “And people who want to work with that, you’re very welcome. But we don’t respond to threats.”
Facebook has asked the Australian government to postpone the implementation of the code for six months in order to give them time to make alternative deals with news outlets to pay for content.
