Australian Government, Media Companies Challenge Tech Giants Over Sharing Ad Revenue

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Australian Government, Media Companies Challenge Tech Giants Over Sharing Ad Revenue

As tech giants rose, newsrooms suffered.

Australian Government, Media Companies Challenge Tech Giants Over Sharing Ad Revenue
Credit: Pixabay

The Australia’s competition watchdog has flagged the possibility of news publishers boycotting Google and Facebook in an attempt to force the tech giants “to offer news businesses more appropriate remuneration for the use of their content.”

Preventing tech companies from using Australian news is one of the possibilities outlined in a concept paper released this week by the Australian Competition and Consumer Commission (ACCC). 

For example, imagine Googling “coronavirus Australia” and the results not including any analysis or commentary from health or political journalists or experts on the current cases or the government’s lifting of restrictions? Whether this would make the search engine less attractive to its users is central to whether the ACCC would recommend such a move.

ACCC Chairman Rod Sims told reporters on Tuesday that tech companies have a lot to gain from having reputable news sources appear on their platforms.

“What’s it worth to them to have news as part of that mix? That’s the question that Google and Facebook haven’t been addressing,” he said. “If you want to be all-singing and dancing news engine, you need news, so when someone types in ‘coronavirus’ you get all the search titles on that, otherwise, it’s a pretty limp search. 

“If you don’t have the news and you type in ‘coronavirus,’ then you get a whole lot of fake news. So, it’s in the platforms’ commercial interests to have quality.”

The ACCC report was commissioned last month by treasurer Josh Frydenberg, following the collapse of voluntary talks between the government and tech companies and amid the acceleration of advertising losses at media outlets due to the coronavirus pandemic. 

Google and Facebook have argued that the internet disrupted traditional media but not their businesses specifically and instead claim that their platforms have aided news organisations by helping them reach greater and more diverse audiences. 

The tech giants said they were “disappointed” by the Australian government’s continued efforts to extract money from them after the voluntary talks ended. Frydenberg responded, telling reporters the battle with the tech companies is “one worth fighting.”

“We won’t bow to their threats,” he said, alongside Communications Minister Paul Fletcher. “We understand the challenge that we face. This is a big mountain to climb. These are big companies that we are dealing with but there is also so much at stake, so we’re prepared for this fight.”

Backing the government’s push are two of Australia’s most dominant media publishers, News Corp and Nine Entertainment. News Corp announced earlier this month that it would be suspending 60 of their regional newspapers due to a steep decline in advertising revenue. 

Newscorp’s Australasia boss Michael Miller believes Google and Facebook should pay news media businesses as much as $1 billion a year. Nine chairman Peter Costello said it should be at least $600 million, or 10 percent of the $6 billion they make a year in local advertising.

The ACCC reports timely release comes as BuzzFeed’s Australia operation and digital news site 10 Daily announced that they will be shutting their doors, putting dozens of journalists out of work.

In March, the Australian Associated Press, the only Australian wire service that offers local news, announced it would be letting go of all its 180 staff and closing its doors in June. Without a wire service, it’s likely a lot of stories will go untold as few media organizations can afford the staff to cover the kinds of events the AAP often did. 

According to the Australian Newsroom Mapping Project, 157 newsrooms across Australia have closed temporarily or for good since January 2019. Of those, 51 have closed since the beginning of the coronavirus pandemic. 

The closure of newsrooms is, of course, not unique to Australia. In the last week alone in the United States, 155 jobs were lost at Vice Media, 100 at Conde Nast, 80 at Quartz, and 90 at The Economist. And just yesterday, the 163-year-old Atlantic Magazine announced that it would lay off 68 employees, or 17 percent of its staff, too.

Many countries have long debated how to respond to the rapid growth of tech companies at the expense of newsrooms. Last year, the U.S. Congress introduced a bill that gave news publishers “safe harbor to collectively negotiate with dominant online platforms regarding the terms on which their content may be distributed.”

In 2019, the European Union introduced a new copyright law that requires tech giants to sign licensing agreements with musicians, authors and news publishers in order to post their work online.

Previous attempts to reign the tech giants in have also failed. In Spain, in 2014, Google shut down its news site in protest of a new law that would have forced the company to pay Spanish publishers for the use of their content. It’s unknown how much they would’ve had to pay but not complying with the law would’ve carried a one-time $750,000 fine. 

It’ll be a world first if Australia is able to successfully force the tech giants to pay for news. There’s no doubt the ordeal is being watched closely by most countries around the world.