Canberra, Australia – Australian media outlets have largely welcomed a government move aimed at making Google and Facebook pay for content they siphon from media companies – even though some voices in the industry warned it could have unintended negative consequences.
The decision on Monday to force the tech giants to pay comes as the country’s media firms face a long-standing decline in advertising revenue that has now been exacerbated by the economic impact of the coronavirus pandemic.
“The Australian government has realised that voluntary codes don’t work when there is a bargaining power imbalance,” said Marcus Strom, president of the Media Entertainment and Arts Alliance, a trade union of media professionals that has been calling for a levy on news aggregators since 2017.
“Google and Facebook have in part grown off the back of news content while the creators of that content, news media outlets, have suffered while still producing vital public interest journalism,” Strom added, noting that the tech companies “will now be required to negotiate responsibly with news media and start paying for the content they have exploited for free”.
Michael Miller, chairman of News Corp Australia, the country’s largest media company, voiced similar sentiments, saying the tech giants’ “massive failure” to “remunerate creators and copyright owners has put at risk the original reporting that keeps communities informed”.
He added: “The rush of audiences back to trusted news sources during the COVID-19 crisis has been a powerful reminder that real journalism must not be destroyed by companies that take it for their own use and refuse to pay.”
Years in the making
Canberra’s move has been years in the making. In June 2018, the Australian Competition and Consumer Commission (ACCC) launched an investigation into claims by local media companies that Google and Facebook were generating huge profits from advertising revenue on news they had not produced.
In December 2019, the ACCC delivered its finding and recommended a voluntary code of conduct should be formulated and gave the parties 11 months to make a deal.
But after the ACCC signalled negotiations had stalled, the government decided to act.
“The progress on that voluntary code of conduct has been very limited, so the government has taken the decision to set in place a mandatory code of conduct which will be released by the end of July and then brought into force,” Australian Treasurer Josh Frydenberg said on Monday.
Frydenberg is still considering different remuneration methods to figure out exactly how much the companies that aggregate Australian-produced news will have to pay to its creators. But he indicated “multi-billion-dollar fines” would be levied on non-compliant tech companies.
“What we’ve seen over recent years with the evolution of technology is the rise of these social media giants. It’s delivered enormous consumer benefits to people across the world and indeed here at home, but it’s also been the source of major disruption and its brought into question the viability of traditional media outlets,” Frydenberg said. “This will ensure these media titans will be paying for content and Australia is seeking to be the first country in the world to successfully do that.”
20 years of pain
Like elsewhere, in Australia the shift of advertising revenue from newspapers and magazines to online harks back to the arrival of the internet more than two decades ago.
Between 2001 to 2016, classified advertising revenue dropped from $2.35bn to $143m, according to estimates by the ACCC, adjusted for inflation.
Publishing executives were slow to react to the disruption, allowing the tech giants and their popular social media platforms to take the lion’s share of profits.
The trickle graduated into a landslide in the past month as Australia’s economy faltered under lockdowns to curb the spread of the coronavirus – the International Monetary Fund predicts the country’s GDP will shrink by 6.7 percent this year.
The containment measures have left scores of the country’s newspapers, magazines, radio and TV broadcasts, on life support.
Rupert Murdoch’s Australian flagship media group News Corp has announced it will stop printing around 60 regional newspapers.
The Sunraysia Daily, a country newspaper in the state of Victoria with 100 years of history, has stood down all staff and suspended all printing operations. “Over recent weeks the newspapers have not received anything near the usual commercial support across all advertising sectors to remain viable as a publisher,” said managing director Ross Lanyon, describing the development as “gut-wrenching”.
It follows a March decision by shareholders to close Australian Associated Press, an 85-year-old newswire company with 500 staff, including 180 journalists. “We are now in a situation where too many of our customers are not wanting to pay for our content,” said CEO Bruce Davidson.
Facebook Australia’s managing director Will Easton said Canberra’s decision was disappointing because the company had been working hard to meet the government’s November deadline.
“We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry,” he said, pointing out that the company had recently launched a $100m fund to support news organisations because of the coronavirus-related fall in advertising revenue.
Three-quarters of the fund is for free advertising on Facebook, while grants comprising the remaining $25 million have only been awarded to North American companies.
Google, which last week launched a similar programme offering free advertising for small and local news publishers, told Al Jazeera it believes publishers in Australia already get significant value from the traffic they get every month from people visiting the search engine.
However, Google has proven adept at deflecting new laws that try to create a level playing field.
In 2014, when Spain declared news aggregators like Google would have to pay royalties to use news content, Google simply shut down its news service in the country.
Last year, a group of 200 German publishers used a German copyright law from 2013 to sue Google in the European Union’s Court of Justice for $1.2bn for the use of content. The tech company won on a technicality after the court found the law was invalid because Germany had failed to notify the European Commission that it existed.
France has also tried. Last year, it became the first EU member state to implement Article 11 – a new law written by the union that grants publishers the right to demand royalties from Google when they display their content online. Google got around it by removing the so-called “snippets” – short excerpts for each article.
“We don’t accept payment from anyone to be included in search results. We sell ads, not search results, and every advertisement on Google is clearly marked. That’s also why we don’t pay publishers when people click on their links in a search result,” Richard Gingras, vice president for Google News, blogged at the time.
‘Jury still out’
Paul Hamra, managing director of The New Daily, an independent Australian online newspaper with a cult following, said Australia should try to learn from Europe’s mistakes.
“While paying publishers for content displayed on Google and Facebook seems fair, we need to be careful what we wish for as in other countries, where this has been mandated, the platforms have restricted access to news content on their platforms and everyone loses,” he said.
“It’s an unexpected development. The jury is still out on how this will evolve.”
But Frydenberg promised the Australian government would prove a worthier foe for the tech giants.
“We will not bow to their threats,” the treasurer said. “There’s so much at stake so we’re prepared for this fight.”