Making Google and Facebook pay for news

Australia has now a proposed law to require Facebook and Google to pay for news shared on their sites to help fund public interest journalism.

I know that proposals like this may immediately set the alarm bells for internet freedom advocates. But this proposal is something worth considering, at least as to how to address the power imbalance between the struggling mainstream news media industry and the giant digital platforms.

The declining state of news media businesses, be they local or national, is something that should worry the public. Online social networks are the main reason for this decline. News consumers now prefer to get information carried for free by social media platforms which in turn simply make a free ride on news reports and commentaries reproduced by online news platforms from their traditional mainstream platforms like print and broadcast.

The traditional mainstream platforms produce the product – in the form of news and commentaries vetted by professional editors and written by skilled reporters and respected opinion makers – which consumers now get for free from social media platforms. That works for now, at least for the social media platforms and their users, because the professional news media are still struggling to survive and are not dead yet.

Sooner or later most of them will be dead, or will be reduced to a shell of their former selves if they survive at all this information regime. Sooner or later, if we fail to strike a balance between value and price, and who is going to pay the price for the value people receive or expect to receive, the public will get the worst end of the bargain.

Here comes the Australian Competition and Consumer Commission (ACCC) with its proposed news media bargaining code. The draft code will allow news media businesses “to bargain individually or collectively with Google and Facebook over payment for the inclusion of news on their services.” The code also includes a set of ‘minimum standards’ for “providing advance notice of changes to algorithmic ranking and presentation of news and appropriately recognising original news content.”

“The code seeks to address the fundamental bargaining power imbalance between Australian news media businesses and major digital platforms. This imbalance has resulted in news media businesses accepting less favorable terms for the inclusion of news on digital platform services than they would otherwise agree to,” says the ACCC.

“While bargaining power imbalances exist in other areas, the bargaining power imbalance between news media businesses and major digital platforms is being addressed as a strong and independent media landscape is essential to a well-functioning democracy,” the ACCC says. This proposed law will soon be introduced to the Australian Parliament after the conclusion of its consultation process last August 28.

Facebook immediately expressed its strong opposition on the proposed law. The social media giant, which reported at total revenue and net income of US$70.7 billion and US$18.49 billion respectively in 2019, apparently thinks that news media outlets do not deserve a share of even a small fraction of that revenue. Facebook now threatens to ban publishers and people in Australia from sharing local and international news on Facebook if the proposal to force it to pay for news becomes law.

There is a reason for that misguided arrogance. Google and Facebook totally dominate the search engine and social network online ecosystem. They can afford to ignore the news publishers and even run them into the ground without losing Google and Facebook’s market base in the short-term. I say in the short-term because the ACCC has a very valid point; what is bad for a well-functioning democracy is bad for all of us in the long run, including business giants like Facebook.

Make no mistake; Google and Facebook are not in the business of news and public affairs reporting. They can pretend to do so. With their immense capital they can even buy out local and national news businesses. But they can never replicate the moral, corporate, and professional values that enable the still-surviving news businesses to meet the needs of their audience. According to pundits, the absence of independent and alternative news outlets in Google and Facebook’s platforms will ultimately make their content less compelling.

I hope these social media giants come to their senses and find the humility to sit down with news media outlets to negotiate the details of a revenue-sharing scheme.