AUSTRALIA: THE TECH TITANS ON TOP OF THE WORLD DO BATTLE WITH DOWN UNDER

DANICA CREAHAN WRITES – In response to Australia’s proposed legislation requiring both Facebook and Google to pay media companies for content that appears on their platforms, Facebook threatened to stop sharing local and international news in Australia.

To be clear: The Australian Competition and Consumer Commission has begun drafting a bill for Parliament that would require both tech giants to negotiate payments with news organizations whose editorial content appears on their sites.

This bill is Australia’s way of seeking to solve what it considers a “power imbalance” between long-suffering traditional news publishers and the conglomerates that thrive as a result of online ad businesses utilizing published news content. The move is not entirely unprecedented: In April, France ordered Google to pay media companies for the right to display segments of their articles. In 2014, Spain passed legislation requiring publishers to charge Google for headlines of their stories that have appeared on Google News. Google retaliated by shutting off Google News from Spain and removing Spanish publishers from their service.

Why? “Australia is drafting a new regulation that misunderstands the dynamics of the internet and will do damage to the very news organizations the government is trying to protect,” explained Will Eaton, Managing Director of Facebook Australia & New Zealand, responding to the bill in a company blog post. The post insisted that the platform was a friend to news organizations, but that if the bill were to become law, the platform would “reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram.”

A blackout of news from an entire continent would be not only unprecedented and harmful; it would also send an aggressive message to the rest of the world regarding the future of governmental relations with the private tech companies of Silicon Valley. And while Google has stopped short of declaring it would follow suit along with Facebook, it indicated that such legislation would be so burdensome as to place their free services in jeopardy. Critics within large media companies have identified Google’s response as a “Scare Campaign

Such quasi-totalitarian opposition to the proposed news code legislation is truly alarming. Google and Facebook make up over half of news access in Australia. The news code has been backed by all major Australian media companies, including News Corp Australia, Nine Entertainment and Guardian Australia. These companies view the bill as a way to offset the damage caused by lost ad revenue.

Image pulled from Yahoo! Finance

Nine Entertainment Co., publisher of the Sydney Morning Herald, considered Facebook’s response to the proposed law “strange”: “It is a demonstration of Facebook’s use of its monopoly power while failing to recognize the importance of reliable news content to balance the fake news that proliferates on their platform.”

Robert Thomson, chief executive of the media company News Corp, said the news code would be an “inflection point” for the internet: “I can assure you that not only regulators but media companies around the world and the digital platforms are watching Australia closely.”

Beware, everyone, everywhere: The consequences of this continental face-off with the titans of the tech world could have global consequences.

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