Can Australia Force Big Tech to Pay for News?

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Roar writer Aman Patel on Australia’s newly proposed Big Tech restrictions and the undue power such firms hold over news publications.

We have all been there: tired, procrastinating, and inevitably drawn to the sweet escape of our Facebook feed. Here we find a crisp newsreel that seems perfectly tailored to our views and opinions. As questionable as the effects of this social media echo chamber may be, the Australian government has turned its attention to the procurement of the articles themselves.

Proposed legislation seeks to force Facebook and Google to pay for circulating news content. Under the new arrangement, news publications in Australia should attempt to elicit payment for their content from Facebook and Google. Should this be unsuccessful, the publications can file for mandatory compensation from tech giants, the breaching of which would result in fines up to ten per cent of their Australian-sourced revenue. This has started somewhat of a battle between the tech giants and the Australian government, with Google and Facebook threatening to shut down its search engine and remove some of its services, respectively, in Australia should the measure go ahead.

I imagine that this will come as a shock to some reading this, but it is indeed the case that Google and Facebook do not pay media companies and traditional news outlets in order to use their content. The tech giants claim that this is a fair deal since the news outlets get increased traffic to their websites in exchange for Google and Facebook being able to run their own ads on the article. This is like paying the popular kid in school to let you hang out with him. In theory, you’d gain popularity, but in reality, you don’t, and the popular kid is laughing at you behind your back. It is simply an unfair, unbalanced arrangement that skews so heavily in favour of the tech platform.

Tech platforms further consolidates this position through its algorithms, designed to keep users hooked on their sites by feeding them tailored news. This makes it even less likely that users will take their precious clicks to the news outlets’ websites. The sad truth is that people are increasingly using social media as their chief source of news, with around half of US adults saying they get news from social media “often” or “sometimes”. It seems that the tech giants have gotten the biggest slice of the pie when it comes to news publication, slowly killing off print journalism in the process.

You might be thinking: are news outlets simply fools for agreeing to this deal? The answer is complicated. One possible explanation is that certain news outlets were victims of a certain mysticism pervading the internet age, and were eager to get involved in the action. The problem with this was that, in the absence of a better digital business model, they snatched at the easiest one available: the one offered by the internet gods themselves. Another possible explanation is that this arrangement came about owing to an imbalance of bargaining power. Simply put, the tech giants can force the hand of news publishers due to their huge size and influence.

It is hard to deny the dominance of Facebook and Google – with both being part of the coveted “Big Four”, as coined by author and business professor Scott Galloway in his similarly-titled book. A good example is that of the New York Times, where the prospect of preventing Google from using their content for free was a very risky one. Google had the power to retaliate by blacklisting About.com, a site owned by the Times. It is this kind of leveraging that allows Facebook and Google to get away with peddling quality journalism for free.

Is Australia’s proposed legislation the right plan of action? It does indeed overcome the issue at hand, in that it forces Facebook and Google to pay for the content of news publications. However, in my opinion, this patches the surface level issues but does not address the reason behind it; namely, the sheer power of Facebook and Google to coerce news publications into giving up their content. As a result, a better way of tackling the issue is to curb Facebook and Google’s domination of the market with anti-trust policies such as those being proposed in the EU and US. This could range from tightening copyright laws to breaking up the firms themselves. The result of this could be a situation in which news publications would be able to charge those high prices themselves, with tech companies having to bid to circulate their content.

Nonetheless, Australia’s proposal is a slightly flawed but bold and encouraging attempt at curbing big tech’s unfair circulation of news content.

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