The dispute between News publishers, tech platforms and the Australian government exploded last week when Facebook threatened to pull news from its platform in Australia if proposed legislation on a new bargaining code were passed. Google published an open letter warning of the dangers of the new law.
The legislation would create a binding negotiation code between publishers and Facebook and Google that obliges the two platforms to host messages from any publisher participating in the code and to pay for that content at a price set by an arbitrator.
Most of the coverage of the proposed legislation has focused on the requirement that platforms pay for news. This is a controversial matter as neither Facebook nor Google is forcing news agencies to share their content on Facebook or Google News as both Facebook and Google already share revenue with publishers and news for tech platforms doesn’t make a lot of money. In addition, the code only provides for one-way payments from platforms to publishers, although in other markets such as app stores and internet-based television content providers pay for distribution.
The biggest problem with the code, however, isn’t that the distributors have to pay for content, which is what the model is in cable television. What makes the proposed Australian regime so problematic and unique among democratic countries is that it requires platforms to broadcast the content of any Australian news organization that subscribes to the Code at a price determined by mandatory arbitration.
These two components create a government sponsored media regime in which a government process determines the news that appears in News Feed and Google News, and also sets the price. It would replace the judgment of a government-sanctioned arbitrator for the platforms, even on issues where judges and government officials have historically demonstrated a notable lack of expertise, such as: B. Ranking results in news feeds or search queries.
This regime would be a dramatic departure from other markets where distributors and content creators negotiate terms of distribution, but the parties can walk away if the terms are impractical. For example, HBO Max isn’t available on Roku TVs because the two companies couldn’t reach an agreement. In Australia, however, platforms would be prohibited from charging distribution costs, and they could not refuse to transmit content from a publisher even if distribution at the price set by the arbitrator is expensive.
The proposed law is a deeply flawed industrial policy in which the government intervenes in a business dispute between two industries that are competing for advertising. And it’s likely to skew the tech market too, as the law only applies to Google and Facebook, even as companies like Apple and TikTok expand their news distribution offerings.
More importantly, this regime would shift power from the people who use these platforms and can currently choose which posts to follow on Facebook and Google to unelected regulators and arbitrators.
Of course, Facebook’s decision to withdraw news from Australia will place a real cost on Australians too. The law makes it impossible for Facebook to block only Australian news content. Therefore, the company aims to prevent Australians from relaying news from news sites, including international publications such as The New York Times and The guard.
It is also likely that publishers, including smaller local publications, will benefit from the traffic that Facebook directs to their websites. Facebook will continue to allow the sharing of user-generated messages, but it is inevitable that there will be less quality content on its website and more financial pressure on publishers at a time when they are already struggling.
Reaching this impasse was avoidable. Fostering a stronger news ecosystem is an important goal, but other policy mechanisms are more likely to achieve it. One option is to use voluntary codes between platforms and their users to set stricter standards for consumer choice, misinformation and subscription options when news is circulated on technical platforms. These types of codes have been effective in areas such as human rights, where they have helped establish best practices, provide transparency about company practices, and use audits to hold companies accountable.