Caught, as we are, between an old media dying and a new trying to be born, we should expect plenty more strange phenomena like yesterday’s announcement by Facebook that it was striking news from its platforms in Australian — matched with a strutting “we won’t be responding to coercion” response from Treasurer Josh Frydenberg.
Ignore the public pronouncements from all sides and the spluttering outrage about Australia being picked on. Yesterday’s call by Facebook will have thrown the growing push for regulation of the platforms into a holding pattern. No one can be certain about what happens next.
Moreover, it throws up in the lights the biggest of questions about the giant platforms: can they be regulated? Or, is the only solution to break them up?(Author and internet guru Cory Doctorow argues the latter in How to Destroy Surveillance Capitalism, released last week.)
Here’s what you need to know as we all watch what happens next with the proposed mandatory code between the digital platforms and news companies.
Who’s right? Who’s wrong?
It’s a war between big tech and old media over money and power. No one is right, although both are marshalling deeply moral arguments (free press! Open internet! Fake news! Journalists jobs!) to support their case.
Both are using their old tools: old media pushing its case in mastheads, Google and Facebook using their platforms; old media lobbying regulators, big tech using its global algorithms.
Why should we care?
It’s like the old joke about a lost driver seeking directions: if you wanted to regulate big tech, you wouldn’t be starting from here. You wouldn’t start by centering the interests of old media.
There are simpler models to get money. Former ACCC chair Allan Fels floated one in today’s AFR: a tax on all digital transactions. There are better ways to support media through the digital transition than forcing Big Tech to prop up old models. Making old media dependent on payments from the platforms could accelerate print closures.
The cost in the government’s current plan is the lost opportunity of better regulation.
Who needs whom?
Here’s the nub of the problem: each side believes deeply that the other is a parasite.
Old media is convinced that the platforms need their content to draw users. After all, why else would you go to Google or Facebook? Big Tech says it funnels users to media companies which can make money through advertising or by selling subscriptions — Facebook claims that’s worth $200 million to Australia’s publishers in the first five months of this year.
Facebook thinks that a news-free news feed will be just as — maybe more — profitable. It’s attempting to pivot to transactions through, for example, Facebook Shops launched this year.
Or take millennials’ social media of choice Instagram (owned by Facebook) where the response to yesterday would have been: “Wait… Instagram has news?”
Instagram brings in about a third of Facebook’s revenues. It’s trickier for Google. When you organise the open internet, it’s hard to exclude news. The draft legislation has been drawn to make it all but impossible.
News snippets are one of the tools they use to keep people on their site, although they don’t sell ads on news searches which they say are only a couple of percent of all searches.
Why is the government supporting old media?
Have you met our government?
OK, as Frydenberg said yesterday: “We want a sustainable media environment.” (That’ll be news to the ABC.) The government has been convinced by News Corp that the key to sustainability is to go where the money is: shake down big tech. I mean… errr… “seek payment for original journalistic content”.
So what happens now?
Initially, nothing. Facebook’s boycott starts once the proposed mandatory code goes through parliament, (expected in December). In the meantime, Facebook’s programmers will be working out how to make good on their threat. The ACCC will be responding to stake-holder submissions on the draft which closed last Friday.
Facebook have already alerted users that their terms and conditions will change on October 1: “We also can remove or restrict access to your content, services or information if we determine that doing so is reasonably necessary to avoid or mitigate adverse legal or regulatory impacts to Facebook.”
The big focus remains where it’s always been: in the US. That’s why Facebook put so much effort into alerting US media to yesterday’s announcement.
There, big tech faces a more existential question: will a Democrat administration be elected in November? And, if so, will it follow through on its rhetoric to move beyond regulation to break up big tech?
News Corp and Nine should be careful what they wish for. AAP was recently sold – it would be chump change for Google and FB if they want to setup their own news organisation in Australia. They could then only source news from their own source, and completely exclude News and Nine.
So obvious that it’s a winder they have not already done so.
It really is a surprise that Google, with a history of supporting news gathering experiments in the USA, did not buy AAP because it would have observed legacy news reporting organisations transforming into government influence organisations. And they already had some track record in news collection experiments e.g. https://www.niemanlab.org/2019/03/google-is-putting-dollars-straight-into-building-local-news-outlets-in-a-new-experiment-with-mcclatchy/
Can’t help but wonder how Facebook has no problem identifying and blocking news content from a segment of their market’s feeds, but putting a stop to hate speech, incitements to violence and right wing nutbaggery is all far too hard.
Maybe Facebook and Google should provide some funding to alternative and regional media (hello Crikey!) ? Might be good politics on their part promoting news diversity in a highly concentrated media market.
Women’s sport, maybe?
I wonder why we are not discussing alternative models. For instance why not consider a licensing system somewhat like that used years ago for free to air tv when spectrum was a scarce and thus valuable resource? Surely the mega media companies should pay something (as well as tax) for using our nbn to make their squillions? Mechanisms for distributing the proceeds of such licence fees could be established at arms length from government and be used to fund journalism, the arts etc.
There are at least separate strands to this issue, each of which is sufficiently complex to require discussion on its own:
(i) The financial/legal/economic/ethical argument for requiring the big tech platforms to render payment to old media
(ii) The impact and follow-on implications that a legislative change such as this will have on both the tech platforms and the rest of the internet, both locally and globally
(iii) the technical short-comings or feasibility of the specific legislation that the ACCC is proposing.
We might get a reasonable discussion of the first point from an economist or journalist. The second requires a sophisticated analysis by an IT-savvy tech writer. If Crikey wishes to make a worthwhile contribution to the whole debate, it needs to engage the services of the latter.