UNSW Sydney

One might say that we are at a turning point in how we share: be it either personal stories, moments, or news. As much as we have put our online experiences on a pedestal as either complementary to our daily lives or as a means of escapism from the tumult of in-person exchanges, we have certainly also noticed a lot of the drawbacks they bring to the table. For years now we have grasped their impact on our mental and/or physical health, as well as other adjacent dangers that might put our well-being in peril. Even more recently, the entire world witnessed how interconnected our online persona has become to our being as matters of privacy arose that made us see the red flags one could barely observe through their rose-tinted glasses. 

Balancing out the facts is a strenuous exercise, to begin with: doing something to improve the status quo requires some even greater mental gymnastics. For Australia however, this implied a controversial, legislative twist. Let’s see how their attempts to do so through a new code have worked so far. 

What is this new code?

In February, Australia passed a law that concerns the tech giants Google and Facebook. Introduced in their parliament last December, the “News Media and Digital Platforms Mandatory Bargaining Code Bill 2020” aims to encourage tech companies to negotiate payment deals between themselves and news organizations, either individually or collectively. The new law also entrusts Facebook and Google to invest millions of dollars in local digital content. If negotiations fail, fear not: as a last resort, an independent arbitrator would be able to set the price the tech giants pay domestic media in a way that would benefit the newsgroups. Moreover, tech platforms need to give notice to the news publishers in case of any algorithm changes

On the other side, the government must consider the platform’s contributions to journalism before applying the code to them and has to give a month’s notice if it considers applying the code. Moreover, the law would be employed only to the media companies that are approved as legitimate. This offers the government a liaison in commercial deals, a role which already applies to it within the electricity market that calls for such incentives for a better cooperation

What were the arguments of such a decision?

Australia describes Google as a near-essential utility that has little market competition since it is the dominant search engine in the country. Moreover, social media has become a relevant source of news, since 52% of Australians used such platforms for this reason. Despite their relevance, news publishers get a small portion of the advertising revenue revenues that their content generates. This revenue, limited as it is, is also often unstable as it largely depends on the algorithm of Google and Facebook, which is constantly changing and has an impact on their reach. 

Besides the market power that both Facebook and Google have, the Australian Competition and Consumer Commission chair added that such platforms do not need any media company in particular, impeding them in making commercial deals. 

The context was also fueled by the already-existing discussions from 2020 revolving around Facebook’s Mark Zuckerberg who was called to testify, in front of the United States of America’s Congress, over antitrust concerns.

What were the initial reactions?

The unheard-of new law has been initially opposed by Facebook and Google due to the initial approach of the code. More specifically, it would have allowed the news organizations to bargain with the tech companies without taking into consideration the contribution the platforms provide to journalistic endeavors. As a result and before the aforementioned changes, Facebook shut down news pages in Australia. After witnessing the initial reaction of the tech giant, Australian Prime Minister Scott Morrison stated this move would create an even more determined context in which such law is passed. Criticizing what he called Facebook’s arrogance to cut off essential information from its platform, he then highlighted the lack of intimidation that such attitudes ignite – attitudes that only perpetuate the idea that the BigTech is above the law -. 

The gamble that Facebook undertook, which was to offer a glimpse of how the approach to the code would have looked like without the subsequent changes. Given the amendments added by the Australian lawmakers, their presumption was proven correct. Others, however, have pointed out Facebook’s reckless power move in depriving its users of services on which they used to rely, albeit temporarily. More precisely, it bereaved its users from Australia’s Bureau of Meteorology posts, as well as the state health departments, charities, and crisis services, to name but a few. 

Needless to say, Facebook damaged its reputation with this reaction.

Divergently, Google has sought to strike deals on its own with media companies to ease the impact of the code, despite its initial reactions, which consisted of threats to leave Australia. The takeaway is that, in a relatively small country, such regulation can shape the behavior of a tech giant such as Google, creating an effect that gains momentum and that is eventually experienced outside of its borders.  

Other countries did not shy away from sharing their own opinion either. Countries such as Canada and France, but also the supranational entity European Union, have implied they might follow Australia’s lead. 

Are there any (other) drawbacks from this legislation?

It is safe to assume that everything rarely turns out to be the way it is envisaged. The question mark now stands above the issue of which news organizations will truly benefit from the new code since Facebook and Google will be voluntarily paying enough money to the news organizations to avoid negotiations. If the two tech giants work out enough deals on their own so the law will not apply to them, the smaller organizations are at risk of accepting what they are offered, since they are left with little bargain power. Google and Facebook will pay for the news but will do so on their own terms. 

How does the future of the legislation look?

Australia’s new code has sparked controversy and has, possibly, begun a lengthy domino effect whose effects will be seen gradually, depending on the decisions that the so-far-inspired countries will subsequently make. What guise such legislation – if any – will take, this is yet to be seen.