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SYDNEY: Facebook’s decision to remove news content from its platform in Australi comes in response to legislation that would force tech giants to pay for sharing news content.
While big tech and the media have fought for the right to news content in other jurisdictions, Australia’s impending law represents the broadest reform and is being watched closely around the world.
Here’s a look at the proposed rules and what they might mean for users:
WHAT’S GOING ON
After two decades of light regulation, tech companies like Google and Facebook are coming under increased scrutiny from the government.
In Australia, regulators have focused on the dominance of corporate online advertising and its impact on struggling media.
According to Australia’s competition watchdog, for every A $ 100 spent on online advertising, Google captures A $ 53, Facebook takes A $ 28 and the rest is shared among others.
To level the playing field, Australia wants Google and Facebook to pay for using expensive news content to produce in their searches and feeds.
WHAT WILL THE LEGISLATION DO?
The so-called Media Negotiation Code has been designed by the government and the competition regulator to address this imbalance of power.
READ: Australia to submit landmark Google and Facebook legislation to parliament next week
Under the code, the media will have to negotiate trade agreements individually or collectively with Facebook and Google. If they cannot agree, an arbitrator will decide which offer is more reasonable.
If Facebook or Google breaks the resulting agreements, they can be fined up to AU $ 10 million (US $ 7.4 million) in civil penalties.
The law also requires tech companies to notify the media when search algorithms change in a way that affects the order in which content appears. They must also share how they use consumer data from news content on their sites.
The proposed code will apply to Facebook and Google, although the regulator, which advised the government on the legislation, has said other tech companies are likely to be added.
HOW IS AUSTRALIA’S APPROACH DIFFERENT?
Australia has used competition law to draft the Media Trading Code, an approach that the regulator says is much more effective than copyright law used in other jurisdictions, including the EU.
The difference between the two has been highlighted by recent deals with Google by Australian publishers and the media in France, which is the first EU country to incorporate an EU copyright directive into national law.
Australia’s two largest free-to-air broadcasters have reached deals worth a collective AU $ 60 million (US $ 47 million) a year, according to media reports. That dwarfs the $ 76 million that Google will divide among 121 publishers in France over three years, averaging $ 209,000 a year per publisher, Reuters reported.
READ: News Corp signs news partnership agreement with Google
WHY HAS THE DISPUTE ESCALATED?
Australia’s proposed legislation has reached a critical point, with broad support in parliament, where it is expected to become law in a few days.
In recent years, traditional media companies operating in Australia have suffered major impacts on revenue streams due to declining subscriptions and advertising.
After Facebook decided to take the news offline on Thursday (February 18), Australian Prime Minister Scott Morrison signaled his willingness to go ahead with the legislation independently.
WHY IS IT GETTING GLOBAL ATTENTION?
Although the rules would only apply in Australia, regulators elsewhere are closely looking at whether the system works and can be applied in other countries.
Microsoft, which could gain market share for its Bing search engine, has backed the proposals and explicitly asked other countries to follow Australia’s lead, arguing that the tech sector must step up to revive independent journalism that “goes to the heart. of our democratic freedoms. “
European legislators have cited the Australian proposals favorably when drafting their own legislation on the digital market across the EU.
READ: Australian emergency services affected by Facebook ban
Facebook’s move has also raised questions about countries’ “digital sovereignty” after some emergency response Facebook pages used to alert the public to fires, floods and other disasters were inadvertently hit.
The company moved quickly to correct that mistake, but the incident left questions about whether social media platforms should be able to unilaterally remove services that are part of the crisis response and can even be considered critical infrastructure.
WHY ARE GOOGLE AND FACEBOOK OPPOSED?
More broadly, Facebook and Google are rejecting a host of potential regulations around the world that threaten to undermine the business models that have allowed them to become some of the largest and most profitable companies in the world.
Specifically, both companies say they have no problem paying for news, and both companies already pay some news organizations for content.
Their main objection is being told how much they have to pay. That goes far beyond European law, which encourages agreements between social media and traditional media companies.
Under Australian rules, an independent arbitrator could decide whether the agreements reached are fair, to ensure that tech companies are not using their online advertising power to dictate terms.
Opponents have argued that the new rules amount to a gift from Australia’s conservative government to News Corp allies of Rupert Murdoch, the country’s largest media group, to shore up its struggling newspapers.
WHAT DOES IT MEAN TO ME?
The inventor of the World Wide Web, Tim Berners-Lee, warned that the introduction of the precedent of charging for links could open a Pandora’s box of monetary claims that would break the Internet.
“Links are critical to the web,” he said in an Australian Senate investigation. “If this precedent was followed elsewhere, it could make the web not work for everyone.”
Both Facebook and Google have argued that the proposals would spell the end of some of their most popular products.
But Facebook’s decision to block news in Australia would be difficult to replicate in larger markets like the United States and Europe as a whole, potentially hurting the company’s bottom line.
Google Australia had made similar threats to withdraw its search service in Australia, but withdrew from the edge and instead made deals to pay various Australian media groups.
