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Australia vs Facebook and Google issue is affecting media everywhere

In a tweet on Friday, Australian Prime Minister Scott Morrison said that he had spoken to Prime Minister Narendra Modi on a number of issues the day before, and also talked about the progress of our media platform bill.

A global diplomatic offensive to drum up support for Australia’s proposed legislation has been launched by Morrison to compel Internet giants Facebook and Google to pay media firms for news content published on their platforms. He has learned to reach out to Prime Minister Justin Trudeau of Canada as well.

Pushback and Initiative

The proposed law, the Mandatory Bargaining Code Bill 2020 for News Media and Digital Channels, mandates a bargaining code that seeks to require Google and Facebook to pay media organisations for using their content. In governing social media across geographies, the law sets a precedent and is being closely watched worldwide.

On Wednesday, Australia’s opposition Labour endorsed the Bill in the House of Representatives, paving the way for it to pass the Senate and could soon become law.

Meanwhile, Facebook, which has 17 million users in Australia, retaliated with a news blackout, blocking all news links on its website starting on Thursday, even as Google moved to sign a contract with Rupert Murdoch’s News Corp. It also ended up silencing some emergency services in the process, and allegedly deleted posts from the Australian Meteorology Office, state health departments, fire and rescue services, charities, and emergency and disaster services.

They might be changing the planet, but that doesn’t mean they should be running it, Morrison said on Thursday in a Facebook post about the major tech firms. We’re not going to be intimidated by this BigTech bullying act, trying to pressure parliament as it votes on our significant News Media Bargaining Code… I’m in regular contact with other nations’ leaders… We’re not going to be intimidated, just like we weren’t when Amazon threatened to leave the country and when Australia brought other nations together to fight the release of terrorist social content.

The Sydney Morning Herald reported that Morrison raised questions about Facebook and its power in his conversation with Modi on Thursday when the company was seeking support from the Indian government in a huge market.

Legislation of Australia

Back in 2017, a voluntary code was recommended by the Australian Competition and Consumer Commission (ACCC) to fix the bargaining disparity between major digital outlets and media companies. In 2019, the Australian government invited different stakeholders and the ACCC to create this voluntary code based on these recommendations.

However, in April 2020, the ACCC found out that the companies were not likely to voluntarily enter an agreement. The government then asked that a mandatory code be drafted. In July, the draught law was issued, and after making some substantial changes, the government subsequently adopted the Bill.

Resistance has been met with the clause forcing Google and Facebook to enter into payment agreements with media firms, with an arbiter required to adjudicate if no compromise is reached, or face heavy fines. For smaller publishers who can face a bargaining skew with the platforms, the arbiter is mainly considered significant.

In addition, while the original code envisaged preventing tech platforms from making algorithm changes that influenced how the news of a specific publication is consumed and notifying publishers of these changes, the Bill decreased the changes that need to be reported to news providers. This opens up the possibility that small and large news companies could threaten the equal playing field.

Google threatened to delete its search engine from Australia in January, and Facebook warned it might block the posting or sharing of news links by Australian users. Google has now backtracked, but both companies’ underlying point is that the advertising industry has already benefited from digital platforms’ traffic to them and that the new regulations would expose Internet companies to “unmanageable levels of financial and operational risk.”

The strategy of Major Tech elsewhere

Facebook plans to introduce its news tab feature (available in the US since 2019) in the UK, with probable links with The Guardian, The Economist, and The Independent, which have been confirmed by media outlets. And Google is rolling out Google News Showcase, the news offering site.

Both sites are both aimed at formalising payment arrangements with news outlets. Google said in a statement last month that News Showcase, which features storey panels that allow participating publishers to bundle stories inside Google news items, has more than 450 publications onboard in a dozen countries, including Le Monde, Le Figaro, and Libération in France; El Cronista and La Gaceta in Argentina; TAG24 and Sachsische Zeitung in Germany; Jornal do Commercio in Brazil.

Google has said that it would pay news outlets in France for the online use of their content. His first reaction to France’s introduction of EU copyright laws, however, was to stop showing news snippets until the French competition regulator stepped in last October. In Spain, Google also pulled its Google News service, making payments to the publishers compulsory. In Australia, even as Facebook has chosen to go on the offensive, Google seems to have opted for a more conciliatory stance.

The major issue

As Google agreed to pay for news releases in France just hours before threatening to delete its search functions in Australia, paying for news feeds in itself seems to be less of a concern for the tech giants. In reality, the war in Australia focuses on how much influence these businesses should maintain on their payout process, operational aspects such as determining the number of payments for news feed sources and having to report changes in their algorithms.

Payments have been expressly related to copyright by the European authorities, without pushing a device into the agreements. On the other hand, Australia’s code focuses almost exclusively on the negotiating power of news outlets vis-à-vis the tech majors and even has some oppressive features. In Australia, it is more of a rivalry problem, of power equations between conventional news outlets and tech platforms, hanging in the balance with the question of exploitation of superiority by the latter.

The debate in India

So far, policymakers in India have concentrated on the supremacy of intermediaries such as Google and Facebook, which are placed in a way that, even via these channels, service providers cannot reach consumers. A substantial debate has yet to begin in any substantive way on the effect of intermediary channels on the health of news media outlets.

There are 300 million users of online news outlets, portals and aggregators in the country, according to a FICCI-EY report for 2020, representing approximately 46 per cent of Internet users and 77 per cent of smartphone users in India at the end of 2019. India is the second-largest consuming nation of online news after China with 282 million unique visitors. According to EY estimates, digital advertisement investment in India increased by 24 per cent year-on-year to Rs 27,900 crore in 2019 and is expected to rise to Rs 51,340 crore by 2022.

The additional major news aggregators in India are Dailyhunt and InShorts. Initially, publishers were paid Rs 5-6 lakh monthly for content hosted on Dailyhunt, according to a January 2020 study by Harvard University’s Nieman Lab, but after these terms were updated, they started to quit the site. Startups such as Dailyhunt and Inshorts are not yet able to find a viable business model, even without the discussion in India reaching the point that news aggregators are expected to make payments to publishers.

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