Facebook and Google dig in over proposed Australian law
A drama is playing out in Australia, as Facebook and Google engage in a battle with government that raises fresh questions about their dominance in the information flow of our daily lives.
In recent weeks, Google and Facebook have doubled down on their threats to cut off some services in Australia if the government there moves ahead with proposed legislation to require both companies to compensate media outlets for content. Advocates praise the draft law as a “global” model to address the market dominance of the two giants and the impact on journalism.
It’s a showdown that could well preview a debate here in Canada, where news publishers, including Torstar, the Star’s parent company, are pressing the federal government to follow the Australian model.
What’s at stake was starkly illustrated in the blank front pages of daily newspapers, including the Star, on Thursday. The empty pages are meant to underscore the economic crisis that has eroded journalism in towns and cities across the country.
“It’s a fact — local newspapers and local headlines are disappearing across Canada,” Torstar CEO John Boynton wrote in an open letter in the Star.
That same concern is at the root of the debate in Australia, where politicians are trying to address the Google and Facebook’s stranglehold on digital advertising — together they control more than 80 per cent of online ad revenue there — and what that means for media outlets faced with a dramatic decline in their own bottom line.
Those efforts resulted in proposed legislation last year that would oblige Google and Facebook to enter into commercial agreements with news outlets to compensate them for journalistic content that appears on their platforms. If deals can’t be struck, it allows for mandatory arbitration.
Now the debate — threats and all — has taken the stage at a committee of the Australian Senate. The committee heard how the media landscape in Australia — like so many locales — has been hit hard by the shifting economics. Over the last decade, as many as 5,000 journalists have stopped working in the country.
“It is regional and local news that has been hit hardest by the decline in the media industry. This is not a situation unique to Australia, and the consequences of these emerging so-called news deserts are grave for communities and for democracy,” said Adam Portelli, a director for the Media, Entertainment and Arts Alliance, a union that counts journalists among its members.
The revenue-sharing proposal is not a silver bullet and not likely to reverse the losses that have already occurred, Portelli said. But he said the funding is one part of the solution to put the media industry on a more secure footing.
“We strongly support a system to recoup some revenue from digital platforms operating in Australia as a contribution towards the production costs of the journalistic material they carry,” he said in his appearance before the committee.
Yet Google and Facebook have opposed the move and threatened to cut off services in the country if it becomes a reality.
Speaking to senators, Mel Silva, Google’s managing director for Australia and New Zealand, made plain the threat to stop making Google search available in Australia if the proposed legislation is not changed, citing what she called “unmanageable financial and operational risk.”
Facebook also reiterated its threat to pull news off its platform in Australia. “That is not what we want to do, but we have explained that it is something we have to seriously consider given the nature of this unworkable law,” Simon Milner, Facebook’s vice president of public policy AsiaPacific told the committee.
Google’s opposition to the legislation took a twist when it was revealed that the company was tinkering with its algorithm to prevent certain stories from Australian news outlets from appearing in searches for some users.
It’s no coincidence. Silva — whose company earns $4.3 billion (Australian) from advertising in the country each year — said the action was part of “our scenario planning.”
Still, it’s hard not to see the move as sabre rattling, a notso-subtle reminder to Australian policy-makers where the power lies. Google’s secret experiments — the company only admitted to it after being called out — drives home its dominance in the online sphere, a point made at the committee.
“The last few weeks we have experienced the sobering power these platforms have over our lives. Big tech have threatened to pull services from the country. They have altered the content that thousands of Australians see, in the name of a media stunt. And they have actively used their monopoly control over information markets to try and influence Australian opinion,” Matthew Nguyen, policy lead with Reset Australia, an organization focused on digital threats to democracy told the committee.
That’s a preview of what we could see play out here in the coming months. The disappearing headlines underscore what’s at stake.