Australia’s News Media Bargaining Code is Bad News for the Internet
If you don’t live in Australia, you’d probably be blissfully unaware that Google has recently threatened to pull its search functionality from the entire country. If you do live in Australia however you would have recently had the privilege of being reminded about it every single time you do a Google search.
The News Media Bargaining Code proposed by the Australian Competition and Consumer Commission (ACCC) is a piece of legislation that will mandate Google and Facebook to pay Australian news sites for linking to or featuring news content.
The intent behind this legislation is to attempt to find a solution to the burning issue around the commercial decline of revenue for public interest journalism and news. On the surface this may sound like a good thing but for anyone who works with web technologies this notion sounds alarming.
The News Media Bargaining Code that is being introduced by the Australian government is bad news if you care about the internet. It’s been instigated by Rupert Murdoch’s News Corp in order to prop up his increasingly unprofitable conservative media empire. Murdoch has been talking about getting search engines to pay for his content for over a decade, and now Australia’s subservient conservative government is complying with Murdoch’s wishes. Yes it will cover other news outlets but Murdoch controls 70% of Australia’s print circulation, and a good chunk of the rest is Nine (owners of Fairfax) whose chairman is none other than Peter Costello, the former treasurer of Australia, who used his media empire to orchestrate a $10,000 a head fundraiser for his old party.
At the moment the government has made this a very populist deal by picking on two tech giants who are undoubtably problematic: Google and Facebook. There are real issues with privacy and antitrust with these two companies, however the current proposal is to punish these two monopolies by getting them to make cash payments to another highly problematic monopoly. I’m not buying it.
Tim Berners-Lee, inventor of the World Wide Web, raised his concerns in a submission to the Senate inquiry into the code.
Specifically, I am concerned that the Code risks breaching a fundamental principle of the web by requiring payment for linking between certain content online. […]
Requiring a charge for a link on the web blocks an important aspect of the value of web content. To my knowledge, there is no current example of legally requiring payments for links to other content. The ability to link freely — meaning without limitations regarding the content of the linked site and without monetary fees — is fundamental to how the web operates, how it has flourished till present, and how it will continue to grow in decades to come.
Put simply, websites do not pay to link to other websites.
The core issue here is that it breaks the commerce model of the internet. It advocates the notion that refers of traffic should have to pay to link to an article. This makes no sense really because news sites receive traffic out of this arrangement which then gives those news sites the opportunity to serve up ads and peddle subscriptions to their readers. You could just as easily make the case that news sites should pay Google and Facebook for providing them with traffic.
The News Media Bargaining Code only serves to entrench big media empires. The payments only apply to traffic sent to a very select group of entities that produce “core news” and have an annual revenue of greater than $150,000; specifically, News Corp, Nine, The Guardian, the ABC, and SBS. Someone running a little personal blog (or publishing on Medium) isn’t suddenly going to find themselves 6 cents richer, it’s solely about propping up the big media machines that control the narrative and are proxy government mouth pieces.
This is a textbook case of rent seeking behaviour on the part of News Corp. They have absolutely no idea how to compete in the internet age despite having considerable economic resources to do so. They tried to buy their way into internet monopolies when they bought MySpace at a time when it was the dominant social media platform on the internet, and then ran it into the ground in a few short years. Instead, News Corp have decided that their best bet to entrench their power for the generation to come is to use their monopoly position to coerce the government to tilt regulation in their favour through regulatory capture. By doing so News Corp will gain a share of the wealth created by Google and Facebook’s technology without creating any new wealth through innovation.
The ACCC’s role is ultimately to work in the interest of consumers, but this legislation seeks only to benefit big media empires. It remains unclear what advantage, if any, will be gained by consumers out of this legislation.
Google have threatened to remove their search functionality from Australia because what they are really afraid of is the potential for this sort of legislation to spread to other countries. It is almost certain that this is a hardball tactic used in order to halt this precedent. In the end it is likely that Google will comply with the legislation begrudgingly just as Amazon did when it was forced to comply with Australian goods and services tax laws.
I believe the far greater problem that will occur is that once this code is in place it logically won’t take long before this sort of legislation is applied to all refers of internet traffic. What will happen then is that well-resourced companies like Google and Facebook will be able to comply with this legislation, but smaller operators won’t. The only logical outcome from this is the stifling of innovation on the internet. Startups will be scared away from attempting to compete in any area that seeks to improve the online news and journalism business and the big media gatekeepers will entrench the status quo.
What we’ll be stuck with is more Google, more Facebook, and more Rupert Murdoch.
