GP Insights # 479, 28 February 2021
On 26 February, Facebook resumed its services in Australia, after an eight-day black-out that disabled its users from sharing and viewing content created by Australian media companies. Australian users can now return to using the platform as they did previously.
On 25 February, after rounds of negotiations with Facebook, the Australian government agreed to amend parts of the proposed law and passed the ‘News Media and Digital Platforms Mandatory Bargaining Code.’ The law will force tech firms like Google and Facebook to pay for the news content created indigenously. The treasurer and communications minister made a joint statement referring to the law and said, “The code will ensure news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism.”
What is the background?
First, the global call for regulation of search engines and social media platforms. Australia may be the first country to legally bind Google and Facebook to a deal that compensates digital media but the fight against these firms had begun a few years ago. In 2018, the European Union reformed its copyright laws, enabling them to request a fee whenever its content was displayed on their websites. Countries like the UK, Canada, United States, France, Germany, India, Indonesia, Thailand and New Zealand, to name a few, have all proposed similar bills in their parliament. The issue remains to be a grey area with governments unable to decide what parts need to be regulated.
Second, the need for the law. In the 21st century, where the information is available at record speed and bare minimum costs, media companies have to depend extensively on ad-revenues and subscriptions which fluctuate according to behavioural algorithms. Australia’s News Media Bargaining Code dictates big tech firms compensate Australian news agencies for using their content on popular social media platforms. The code seeks to address the imbalance of revenue suffered by media companies due to the upsurge in usage of digital platforms in recent decades. The new law will ensure appropriate compensation to media firms that will help them sustain in a world where news and information are freely and easily available.
Third, the privacy issue. National governments, while ensuring copyrights and neighbouring rights of media firms, will also be able to keep control of the content that reaches the internet. This would essentially change the existence of the free press, which Google and Facebook have been opposing. Both companies threatened to stop all services in the country. However, on 15 February, Seven West Media Ltd announced the signing of a $ 30 million deal with Google. On 18 February, Facebook unfriended the country over the government’s insistence on the bargaining code; it emphasized the difference in functioning from Google which is innately entangled with media agencies for sharing content. Facebook, however, is used by the same agencies to share their content voluntarily, to increase their subscription and ad revenue.
What does it mean?
First, a precedent for the rest of the world. Countries that have been looking forward to introducing similar laws in their country will now have an example to learn from. Other tech firms, along with Facebook and Google, have already started securing their interests in other countries. The new code will change the nature of all internet service providers.
Second, along with a regulated income for media firms, the content on the internet will also be regulated as only the paid articles can be made available on these websites. The issue will now extend to how much freedom media firms will be given to publishing news in its purest and unadulterated form.