Australia’s ACCC (Australian Competition and Consumer Commission) has proposed radical new laws, known as the News Media Bargaining Code, forcing the big tech companies – Google and Facebook – to negotiate with major news publishers to redistribute some of their ad revenue from news, back to the publishers. In what looks like an effort to please Rupert Murdoch’s Newscorp, with no other more worthy intent, the regulator has targeted the most benign of the many sins of big tech as its focus and overlooked many other issues requiring of urgent regulatory attention.
You’d struggle to find an activity in Facebook and Google’s world that doesn’t require more regulation; privacy protection, disclosure, informed consent, political radicalisation and polarisation, tracking, social media addiction, bullying, trolling, monopolistic behaviour, are just some of the issues requiring regulation. Yet in its first major foray into big tech regulation, Australia’s ACCC has zeroed in on a problem that doesn’t really stand up to analysis – as Google has explained in messages to its millions of Australian users from CEO Melanie Silva.
Silva’s message might be alarmist and lacking self-awareness – with a market cap of more than a trillion dollars, Silva’s reference to “special treatment to big media companies” jars.. But in this case, the facts are on Google’s side.
News publishers say they are due up to $1 billion for the use of news content in search and the Facebook news feed. Google has said it makes around $10 million in ad revenue from displaying news snippets. That’s a big gap to negotiate.
Fighting back, the big tech players rightly point out that the snippets and links they display generate a huge amount of traffic for news publishers. They also make the point that the collapse in news publishing revenue dates back to the collapse of classified advertising. Something that predates the dominance of Google and Facebook.
It’s complicated. But it looks suspiciously like the ACCC, in its efforts to appease NewsCorp, is barking up the wrong tree. The fact that the ACCC inexplicably excludes the public broadcasters, the ABC and SBS – loved by Australians and loathed by the culture warriors of the government – from the code, adds further fuel to the argument that this is Newscorp directed policy.
In a stoush between Google and Facebook, NewsCorp and the Morrison Government, there are no good guys .
While The Algorithm is Toxic believes far-reaching regulation of big tech is urgent and essential, we also reckon that regulation must be well thought out. The ACCC is missing the point.
Google and Facebook dominate advertising because they have advertising products that are far superior to those of the news publishers. These are not just differences of quality, they are different in concept. You don’t need to be a marketing guru to know that a company that tracks search, web browsing, purchases, interests, locations, political preferences and friends will be able to provide a more targeted and effective advertising solution than a news publisher that doesn’t have access to this data.
In 2017, Fairfax Media (now Nine Entertainment) signed over the management of its advertising to Google in a telling surrender to the superiority of Google’s surveillance-based ad product.
The tech giants play fast and loose with most people’s understanding of privacy, disclosure, informed consent and accountability. And that is the source of their market power and the assymetry of their relationship with all publishers (not just news publishers).
That assymetry won’t be fixed by forcing negotiations and locking in commercial arrangements that embed the market power of big tech and the practices that created it.
Democratic governments have sat back for decades while Google and Facebook have amassed massive market power, based on questionable surveillance practices that are harmful in myriad ways – including to publishers and publishing.
If governments want a more vibrant publishing environment that fairly allocates the dividend of original work, including news production, they need to revisit commonsense concepts of privacy, informed consent, disclosure and accountability. Such a reappraisal will establish proper limits on the power of big tech and transform the advertising and publishing landscape for everyone.
If you would like to further explore the issue of Google and Facebook and the urgent need for regulation, check out The Age of Surveillance Capitalism, The Fight for a Human Future at the New Frontier of Power by Shoshana Zuboff. It’s a uniquely insightful read on the urgent threats posed by big tech.