Australia vs Big Tech: Standing up to bullies
Frame of Reference
Big Tech has grown to the extent where it can challenge the authority and might of the nation state. And this power is derived from its monopoly over our data sets, arising from a policy of mergers and acquisitions that puts ever more personal data in the hands of the few. With Facebook’s unilateral decision to stop providing links to news in Australia, it would be interesting to see how governments talk to dismantle the power of big tech.
The confrontation between Australia and two of the big tech companies – Facebook and Google – has been looming large for some time. A large part of the traction for both platforms has been their extraordinary ability to link to news of various kinds – local, national, international, and interest-specific. The result of this has been extraordinarily beneficial to both companies - primarily, in terms of the data trail we leave behind while reading and sharing. That data, in turn, is packaged and sold by both Google and Facebook to advertisers. Over the last decade, as digital has become all pervasive, advertising has moved from traditional media to the tech platforms. Today, Facebook and Google account for over half the world’s advertising revenues.
Australia looked to see how Facebook and Google could pay to link to news – the very glue that holds their networks together. They looked to see how Google could pay royalties to news publishers for using news in the newsfeed and search. The idea behind the Australian legislation was that neither Facebook, nor Google would be as attractive to users, if they didn’t ride on the back of news. And they need to pay for the news.
Both Google and Facebook have much to lose from this move. If they accept this in Australia, it will become a precedent for their interactions in every market. Both companies put their full-blown lobbying and PR machinery into action, creating campaigns and lobbies to stop the Australians from enacting this as law. And they failed. Last week, Australia took the call to get Facebook and Google to pay royalties to news companies.
Google complied. It has entered into agreements with Rupert Murdoch’s news corporation and a variety of other news outlets, to work out a licensing model. Facebook, on the other hand, decided to prevent people in Australia from sharing news links. However, as Facebook has realised, it is not easy to just filter out news links to block. It also ended up blocking pages belonging to charities, politicians, local health services, and its own pages. The backlash in the country against Facebook is huge. World over, Facebook is being seen as the bully, using its monopoly power to buck the legislation of a small nation. It is not that the notion of paying publishers is new to Facebook. It has entered into agreements with large American news organisations to pay for carrying their headlines.
Facebook’s decision to stop linking news in Australia could not have come at a worse possible time for big tech. World over, there are accusations of big tech colluding to not comply with government regulations and undermining democracy. Facebook, in particular, has been at the receiving end of these criticisms from the time the Cambridge Analytica scandal broke. The condemnation across the world of Facebook’s actions has been swift – from politicians, media houses, and academics.
The feeling is that Facebook – that includes FB, Messenger, WhatsApp, Instagram – is getting too big, and too powerful for the good of the world. They are now challenging governments on the most fundamental issues. In the USA, Facebook is facing antitrust action for illegal monopolisation. The EU is investigating it for a variety of iffy trade practices. And it is likely that 2021 would be the year where countries take action to reduce the power of the tech giants. And a starting point would be to help break them up and set Chinese walls between data stores.
But for now, the question turns to Australia’s solution for saving local news and what it means to India. It would help reinject credit into a sector that has been hit badly by the sweep of digital technologies. While people seem to be consuming more news than ever before, this does not seem to translate into corresponding revenues for news publishers. It is hoped that independent publishers and smaller news outlets that cater to niche interests will benefit. This move to save news, needs to translate to more money being invested in news reportage, public interest journalism, and newsroom and should not become another way to just increase profits.
And finally, as governments worldwide flex their muscles against the increasing influence of social media on their populations and seek to curb the influence these platforms have on the flow of information and engagement – the world is poised for battle - between those who control our data and those who exercise control on our physical manifestations. And unless big tech can be reined in, the fallout will be quite terrible.