Digital news dance-off down under
The last few weeks have been a bit of a rollercoaster for news publishers in Australia as the battle to strong-arm the proprietors of the internet got real. For those not familiar with the situation, the Australian government has been working on a media bargaining code for the last 3 years. The premise is that Google and Facebook have built such a great mousetrap that they should now pay news publishers for linking to their articles in search results or Facebook’s news feed, even when those very same publishers were the one’s posting the links into the feed. The Code allows for an arbitration model where publishers will argue for a higher value for each link and Facebook and Google will counter.
The arbiter will try to find some common ground and hopefully settle somewhere in the middle. So why the fuss? Well, Google decided to play ball and “settle” with some news publishers that have been pushing this angle for a decade. And Facebook initially raised the middle finger cutting off all access to news content for Australians, local and international. After the Mexican standoff abated and some late-night haggling. Facebook got the Aussie government to bend on a few aspects of the code and declared they were opening the news taps again for hard news to intersperse the standard feed of bigotry, drunk uncle posts and food porn. But what does this all mean for journalism?
Well, that’s hard to say. We know this is good news for the Sith Lord, Rupert Murdoch, and his cabal of climate change denying, populist-politician enabling media companies. They were the ones with pockets deep enough and political connections greased enough to force the Aussie government into making the code a reality. Because the agreements are done on an individual basis, it’s unclear how this will affect the smaller publishers who don’t have a team of devil’s advocates on speed-dial. This effort was wrapped up in the sheep’s clothing of protecting journalism when it really appears to be protecting the interests of people like Murdoch and legacy media houses intent on salvaging what’s left of the status quo.
For Google and Facebook, these publisher settlement amounts are rounding errors to the fines they pay annually, and should rather be seen in the light of appeasing a small group of irritants that can be silenced with a bit of hush money. (Fun fact: Google paid more in fines in 2018 than it did in taxes).
Google reportedly entered into an agreement to pay Nine Entertainment (owner of Sydney Morning Herald and other prominent titles) $30million per year to use its content in various news products. This agreement keeps them out of the risky arbitration process and doesn’t cover search links, although Nine will likely be on a cloud with this deal.
With many of the world’s governments and news publishers looking at the Australian developments with interest, we should not get carried away by the headlines or what this will ultimately mean for journalism. Google and Facebook are bigger economies than most countries, so maintaining the right to negotiate individually with publishers is a big win for them or in Facebook’s case the right to pull out of Australia if they don’t like what they see. They will always have the upper-hand and it’s highly likely that the little guys without fancy lawyers will be shortchanged and NewsCorp content gets to flourish on their news products.
The Australian model is nowhere near the best outcome for an industry struggling to find its place in the digital world, and Tim Berners-Lee, the father of the internet, agrees. Paying a small group of content creators goes against the ideas that the open web was founded on. It doesn’t encourage innovation and deals like this tend to favour sharks like Murdoch.
A better model would be taxing the giants on their local earnings and using that bolster the media industry, with a focus on diversifying investments, training and innovation. The UK government, for example, introduced a 2% digital services tax in April 2020, aimed at search engines, social media and online marketplaces. (Getting the South African government to ringfence and manage that revenue properly is a different rant.)
To put it into perspective: Google made $4.3 billion in Australia in 2018 — on which it paid just $26m in local taxes thanks to Singaporean and Irish tax breaks. A few more pennies to publishers to keep their powerful status quo in tact. They may have lost this skirmish but they are still winning at everything else.
