A shock ran through Australian politics this week when tech giant Google flexed the muscle of its platforms against the threat of mandated payments to old media companies, News Corp and Nine, through an open letter to its 20 million Australian users.
Australia’s political and media elite seemed nonplussed: can they really do that?
It seemed almost unAustralian. At least when old media companies like News Corp use their platforms to promote their interests, they have the decency to dress it up as “news”.
Or when fossil-fuel companies want to resist climate action they wash their campaign through respectable front groups. (Hello, IPA!)
But when, like Google, you have your own channel used by most Australians most days, what else would you do? In its letter Google said the government proposals would dramatically worsen internet services in Australia and could lead to users’ personal data being handed over to media companies:
The law would force us to give an unfair advantage to one group of businesses — news media businesses — over everyone else who has a website, YouTube channel or small business. The proposed changes are not fair and they mean that Google search results and YouTube will be worse for you.
They encouraged YouTube creators to protest the draft legislation up for consultation until August 28 through the Australian Competition and Consumer Commission and foreshadowed further action in coming days. The ACCC responded that the letter was based on “misinformation”.
It’s a first for Australia, but it’s part of a global pattern by the big tech companies to resist regulation — particularly regulation that costs money or challenges their monopoly.
It’s a playbook that includes spending big on lobbying, removing services from countries or states to avoid regulation (and punish regulators), leveraging their user networks to campaign politically and, if necessary, unleashing the lawyers.
Most famously, in 2014, Google shut down Google News in Spain when faced with a law requiring it to pay publishers for using snippets in the News search results.
Both platforms are heavily represented in Canberra. According to Australia’s lobbyist register, Facebook is represented by DPG Advisory Solutions, whose principal, David Gazard, was described in the AFR in 2018 as “number one in terms of who Morrison speaks to”. Google has multiple representatives, including Newgate Communications and TG Endeavour, that claim close connections with the Nationals.
Still they’d be finding it hard to compete with the Murdochs’ News Corp or the Peter Costello-chaired Nine.
Just how far big tech will go to protect revenues has shown up this week in the industry’s home state of California. The two big app-based transport companies, Uber and Lyft, are threatening to suspend operations in the state rather than comply with a law requiring them to treat their drivers as employees (with consequent minimum wages and benefits) rather than independent contractors.
They spent US$100 million boosting a referendum to be voted on in November to overturn the law. Their yes case is being supported through emails to customers and in-app promotions as well as a multimillion-dollar public advertising campaign.
Now, facing a court order to comply with the law this month, Uber and Lyft have threatened to suspend their services in California until their ballot proposal is approved.
The Australian government believes its draft legislation will prevent the tech platforms from suspending or limiting services. However, Facebook has foreshadowed that it doesn’t believe it needs news, saying: “News content is highly substitutable with other content for our users and … does not drive significant long-term commercial value for our business.”
Google says it doesn’t sell ads against news searches and has consistently said it believes its search delivers more value to publishers through subscriptions and advertising than it takes through using news snippets in its results.
Both companies have been attempting to make friends in the news world through grants and training both to start-up media and traditional voices.
The tech platforms have not threatened legal action against the code, but it can’t be ruled out. Last year an internal leak showed Facebook’s chief executive Mark Zuckerberg threatening legal action against any threatened break-up of the company by US regulators.
“I would bet that we will win the legal challenge,” he pugnaciously told staff.
In a country that sees itself as “a mob of loveable rogues and mavericks”, I reckon it’s unAustralian for people to use the term “unAustralian” against those of us that don’t conform to their sort of herd mentality conformity.
Klewso, I agree. Diversity and learning are insufficiently valued. For an erudite exposition, listen to Rowan Williams: “Overcoming Political Tribalism” on ABC.
“Zuckerberg threatening legal action against any threatened break-up of the company by US regulators. ”
I was around to closely watch Judge Harold Greene break up AT&T into “Ma Bell” and the RBOCS, the regional Bell operating companies. When the US perceives market power abused by lateral acquisition, its anti-trust tradition eventually swings the pendulum back. (Australia lacks both the tradition and the performance, so we continue to suffer from oligopolies in banking, communications, power generation etc.)
Zuckerberg’s problem is Facebook’s basic business model is antisocial. It mines the content of your private communications to better target you with advertising. Its contribution to the tech world was the ‘like’ which allowed it to quantify your opinion by a simple count. If the regulators had not been asleep at the wheel, it would have been strangled at birth. So now, if Zuckerberg wants to get “pugnacious”, regulators remember his history and he is on thin ice.
Don’t hold your breath. Break-up by a regulator is slow and Zuckerberg is signalling non-cooperation.
I truly hope News and Nine get kicked out of google search. It’s just a shakedown to prop up their dead business models. The rest of new media will be delighted not to see legacy media dominating search results. Bring it on!
Google used its early lead in search engines to become a Big Tech. It made over 200 acquisitions for $20bn. Most Google services now have their origin in an acquisition.
But there are now better search engines without the bubbles, without the filters and without the privacy leakage.
So we have the option to leave them, and their fight with News and the ACCC behind.
I won’t be crying for Google’s fights.
At least News and Nine, for all their many faults, pay tax in Australia. Google is a parasite.
I guess I must be a parasite too. I use Google Apps for my domain (signed up many years ago when it was free and the account is grandfathered), Gmail to read/send email, also free, and use Google Search (although my preference is DDG), also free, Google Maps, free again… and so on.
I’d say Google provides far more services to Australians that Australians value than Nine Media or News Corp.
I also use these services, but I expect that if the company makes serious money in providing these services to Australians, that it shouldn’t use artificial transfer pricing arrangements to evade paying Aussie tax.
As it commonly known as product placement on a platform NewsCorp, Sky News, Channel 9 should be made to pay Google to be on Google Search and YouTube. If they resist paying for a service to promote their product take it off.
” particularly regulation that costs money or challenges their monopoly. ” – exactly how does the current legislation do that ?
I’m sure news organisations make far more money out of being indexed by Google than vice-versa.
Sorry Christopher, I always enjoy your contributions but when I read the following I almost fell out of my armchair: “Or when fossil-fuel companies want to resist climate action they wash their campaign through respectable front groups. (Hello, IPA!)”
Unless I’m misinterpreting this you’re suggesting that the IPA is respectable? This is the IPA you’re talking about! The reactionary lobby-shop, supported by donors like Gina Rinehart?
‘lobby-shop’ is only part of it; IPA is one of many think tanks globally in Koch supported Atlas Network promoting radical right libertarian economic and social ideology (with whiff of eugenics in the background…)
https://www.sourcewatch.org/index.php/Atlas_Network