The Australian government recently passed legislation that has the potential to completely rework the way in which news is disseminated on the internet. The Australian News Media Bargaining Code, passed by the Australian legislature in February 2021, seeks to mandate that Big Tech companies like Google and Facebook pay news producers in order to use their content. The timing of the move appears in line with developments around the world, with calls to regulate Big Techs seen all across the globe.
For context, under the previous Australian system (and what is still followed around most of the world), news organizations would simply post or publish their content (with hyperlinks to their own websites) on platforms such as Facebook and Google, whose algorithms would then determine which users would see that content. Once the users clicked on the links to the article, the media organizations would earn revenue from the advertisements that would be displayed to users on their own platforms. The tech platforms argue that they help news organizations by expanding their reach and visibility, and simply allow users to discover news content, rather than ‘deliver’ it to them.
The obvious drawback to this model (from the perspective of the media organizations) is that there is a heavy reliance on the tech company’s algorithm to push the content to the appropriate users. Naturally, given the proprietary and changing nature of these algorithms, there is no transparency about how they work. Additionally, there is also the factor that many users may simply read the headline on the tech platform and not click through to the article, which deprives the media company of potential revenue.
Under the new Australian regulations, news organizations and tech companies are encouraged to enter into content licensing and distribution agreements between themselves, in order to show links to news content on users’ news feeds or search results. If they are not able to do so, an independent arbitrator can set the price that the tech companies have to pay the news organizations. This price will be effective for 12 months, following which another round of negotiations/arbitration becomes necessary. Another key feature of the Code is that tech companies must inform the news organizations of changes to the algorithms, whenever such changes result in a material difference in how news items are identified, processed, and disseminated to users. The new regulations have already resulted in Google and Facebook signing deals with a number of Australian companies.
Under the new Australian model, tech platforms will be required to pay news organizations in order to show links to their content in news feeds or search results. The idea behind this seems simple and fair – news organizations deserve to be paid for their content. It’s a simple enough argument rooted in copyright principles, and ostensibly the Australian move is a step in the right direction in terms of ensuring that content creators are fairly compensated.
Uniformity of Operation – a Concern?
The Australian code only applies to news organizations earning more than AUD 150,000 per year (among other criteria). This immediately means that smaller organizations and independent investigative journalists would not be entitled to the revenue streams that the regulations would generate – thereby depriving the stakeholders most likely to benefit from this move. Additionally, smaller organizations are unlikely to have the resources (both in terms of time and money) to enter into negotiations/arbitrations every twelve months.
The Australian model, therefore, appears to benefit entrenched media organizations that have already reached a certain size and scale and is unlikely to assist smaller, independent organizations and journalists. The regulations (particularly the algorithm notification requirement) have also been criticized by Google and Facebook, saying that such a requirement is not technically feasible.
Copyright and licensing
Outside of any political considerations, the core of this issue appears to essentially be media rights (i.e. copyright issue). News content has always been a paid product (whether through subscription fees, advertisements, or a combination of these), and as technology and media consumption habits evolve, it is only natural that legislation does as well. Every media industry, ranging from music to video games, has evolved its own copyright licensing and monetization practices. It may be argued that the news media industry has been the slowest to do so. Nevertheless, the Australian model of annual negotiation and arbitration raises some concerns about its practicality and enforceability.
While it is certainly necessary for news organizations to be fairly compensated for the content they generate, a more suitable solution may have been to establish a news media copyright society (or the equivalent under Australian law) – this would have enabled smaller organizations to share in the new revenue streams created by the Code. An annual negotiation requirement may result in a highly complex and expensive activity for the media organizations. Of course, considering that this regulation has just come into effect, it remains to be seen what practical changes it brings about.
Implications
As mentioned above, the Australian regulation is part of a wider global conversation about the regulation of Big Tech, as well as the evolution of the news media industry. The European Union’s Directive on Copyright in the Single Market (which we’ll cover in another post) is an earlier attempt at regulating how tech platforms use, host, and share content. The Directive contains a host of provisions, including directing tech platforms to pay news organizations for links to their content. Recently, a group of French publishers were able to agree on a framework with Google for content providers to be paid for the content, in line with the Directive.
It should be pointed out that when the Australian government first proposed these regulations, Google and Facebook threatened to pull out of the country. Facebook even suspended showing news content to their Australian users, and certain changes were made in the legislation after consultation with the tech platforms. Interestingly, Microsoft welcomed the regulations, saying that they were happy to have their Bing search engine comply with these requirements. A cynical perspective of this is that Bing’s market share in Australia is negligible compared to Google’s, and if Google were to pull out or cease providing services in Australia, Microsoft would be happy to fill the vacuum.
What does it spell for India?
From an Indian perspective, Facebook and Google’s initial response to the Australian legislation may shed light on how these and other Big Tech companies may react to similar efforts in India. The Indian government recently had a dispute with Twitter over Twitter’s refusal to remove some posts as directed by the Government, and the conversation about regulating Big Tech has hence also started to develop in India. Governments across the world will likely be monitoring the situation in Australia to determine their next steps in the regulation of Big Tech. We only need to wait and watch the Australian initiative to know what to expect for our country!
