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The emergence of social media platforms has drastically changed how people get their daily dose of news. In 2018, a Pew Research Center survey discovered that around 43% of U.S. adults get their news from Facebook. The share of U.S. adults who get news through Facebook is much higher than the shares who get news through YouTube (21%), Twitter (12%), Instagram (8%), LinkedIn (6%), and other platforms.
Getting news from social media platforms sounds like a foolproof idea. By using just a single, free app you can stay updated on events around the world, watch keyboard warriors and trolls rough it out in the comments section, get financial advice on NFTs and watch viral meme songs. Traditional media outlets, even with their most clickbaity titles and groundbreaking reporting are no match to user-generated content on Facebook.
The popularity of social media, as well as the ability to target advertisements to the intended user, has made it the preferred choice for brands to spend their advertising budgets with newspapers and magazines around the world dying a slow, painful death.
Australian government’s efforts to address the power imbalances between Australian news media businesses and digital platforms like Google and Facebook almost broke the internet down under.
A War of Attrition
In 2020, the Australian Government asked the Australian Competition and Consumer Commission to develop a mandatory code of conduct that addresses this issue. The draft Code by ACCC proposed to solve the power imbalance by establishing a mandatory framework for negotiating and agreeing on payments to news content creators by the digital platforms that display and link to that news content. Simply put, digital platforms will have to share revenues with Australian news media businesses for users that access the news through these platforms.
The Code of Conduct outlines requirements for these big companies to negotiate in good faith how to pay news media for use of their content, advise news media in advance of algorithm changes that would affect content rankings, as well as prioritize original source news content on search page results, and share data with media companies.
The Code includes penalties and binding dispute resolution mechanisms for negotiations between the digital platforms and news businesses. It also defines news content that would be covered by the code and will encompass services beyond Google search and Facebook’s main platform, such as Instagram and Twitter.
Any Australian news media organizations that produce ‘core news’ that is published online, adhere to appropriate professional editorial standards, are editorially independent, and have annual revenue of greater than $150,000, in either the most recent fiscal year or in three out of the five most recent financial years, can participate in the Code.
Eligible news media businesses can then engage in negotiations either individually or collectively with the digital platforms for payment for news content. If the negotiations fail, parties must participate in a mandatory and binding arbitration process, the outcome of which is effectively a price for content, set for the next 12 months.
Further, digital platforms are required to provide advance notice of changes to their algorithms where that impact the ranking of news, appropriately recognize original news content and provide various data points regarding user interaction with news content.
Experts argued over what the internet would look like with the proposed “link tax”.
World Wide Web inventor Tim Berners-Lee told the Australian Senate Committee that the proposed law that would force Facebook and other tech giants to pay media companies would make the internet ‘unworkable’.
“To my knowledge, there is no current example of legally requiring payments for links to other content. The ability to link freely—meaning without limitations regarding the content of the linked site and without monetary fees—is fundamental to how the Web operates,” Berners-Lee said.
Google threatened to shut down its search engine in Australia if the government there passes a new law and especially criticized the provision that forces them to notify Australian news sites of changes to its search algorithm 28 days in advance which is a trade secret. Google argues that disclosing this information to Australian news publishers would give those publishers an unfair advantage over other websites.
While politicians and policy experts were still debating over the repercussions of the proposed bill in Parliament, Facebook decided to go all-in by temporarily deciding to block journalism in Australia giving Australian users a preview of what the platform would be without news on its platform. Facebook not only blocked pages of news outlets and prevented users from sharing links to news articles, but also blocked pages of several NGOs and weather updates as they would also fall in the definition of “news” as proposed by the Australian legislation.
Microsoft turned into one of the staunchest supporters for a new proposed Australian media code viewing it as a model that will strengthen news and journalism. Microsoft in its statement said it will offer small firms a chance to transfer advertising business to Bing with no costs and that it would invest further in the product to ensure it is competitive.
Another unsurprising supporter of these laws was Rupert Murdoch-owned news outlets, which account for two-thirds of daily newspaper circulation in Australia’s major cities, with complete monopolies in Brisbane, Adelaide, Hobart, and Darwin. The media mogul likely stands to gain the most from it. After all, when enacted, the law would require Google and Facebook to pay Murdoch, who used his considerable influence on the Australian government to push for legislation like this for years.
However, before we could see what social media platforms would look like without news updates, Google and Facebook announced that they have entered into agreements with multiple Australian news outlets ending the entire saga.
(Image: Sky News)
The Ethics of Sharing News
Fair payment for original news content is an important outcome in society. News outlets play an important role in a functioning democracy and deserve to be compensated for it. The advent of the internet has accelerated the dissemination of information to such an extent that copyright owners find it hard to restrict their works when it's available to the world. However, the question is whether this model is the right solution to the problem.
The law, while seeming to balance the imbalance, applies to news media entities with already substantial revenues. The $150,000 threshold as part of the requirement to be a registered media business means businesses under that threshold cannot be registered and cannot collectively bargain. What the law ends up doing is regulating the relationship between media giants like Murdoch-owned Newscorp and tech giants like Facebook and Google. It is hard to bat for the underdog when there is no Goliath in the battle. The ones that have the least bargaining power are not even recognized by the law and not even given the option to band together and negotiate collectively as a group.
Moreover, there are several subscription-based digital-only media outlets that have created profitable business models and the law seems to be protecting those that have failed to adapt to the changing business landscape. The demise of traditional media outlets can be attributed to free markets. People can’t be forced to stop making video calls over wi-fi and only use their mobiles to make phone calls because their choices hurt the profitability of telecom service providers.
First to Blink?
While the internet as we know it, did not break as Big Tech was willing to pay the price that Big Media demanded this time around, it is only time that other countries borrow Australia’s playbook and bring in similar laws to “protect” traditional media outlets that result in useful information being wiped out from social media platforms.
Countries around the world have recognized the power Big Tech wields and are actively investigating them for everything, from propagating fake news, their anti-competitive behavior, and even the taxes they paid. We are going to see significant structural changes in how the internet works, maybe the present state of the internet is what Millenials will reminisce about when they teach their kids TikTok dances.