There are sensible options for reining-in the global tech giants, but the federal government has botched its first foray.
There are sensible options for reining-in the global tech giants, but the federal government has botched its first foray.
There is no more fundamental issue for any democratic society than ensuring the maintenance of a free, informed, and unbiased press.
Global media outlets have used advertising revenue to subsidise their ability to provide news coverage at an affordable cost for hundreds of years.
However, during the past decade, this cross-subsidisation has broken down as advertisers have shifted to digital sites such as Google, Facebook, CarSales, and Seek.
In Australia, this shift has led to a 46 per cent decline in traditional news media’s share of advertising revenue.
The loss of billions in advertising income has forced Australian media owners to cut costs.
It is estimated that 157 newsrooms across the country have closed, with more than 3,000 journalists losing their jobs.
The move of advertising to the digital spectrum would normally be viewed as a case of creative destruction, where an innovative business model driven by new technology is providing superior benefits to buyers and sellers.
However, the undermining of the centuries-old media model – where advertising subsidises the collection and distribution of news – directly affects our nation’s ability to protect the vulnerable and hold the powerful to account.
The Australian government recognised that action was required to ensure journalism could continue its key role in ensuring the retention of an effectively functioning democracy.
Unfortunately, the government has decided to address the issue by pressuring Google and Facebook to pay for unsolicited news articles posted on their sites.
The government utilised the Australian Competition and Consumer Commission to build a case as to why Google and Facebook should subsidise Australia’s media.
In its 2018 report, the ACCC said: “To attract audiences, news producers often have to make their content available to search engines and social media with little or no financial return. And to satisfy the workings of digital platforms, news producers create content that is more emotive and shareable.”
The ACCC has since developed a draft mandatory code of conduct to address what it claims to be bargaining power imbalances between Australian news media businesses and digital platforms.
Once the Morrison government legislates the mandatory code, news publishers will be able to undertake enforceable bargaining with Google and Facebook over payment for news articles posted on their sites.
It has been estimated that Google and Facebook could face combined annual payments to Australian media organisations of up to $600 million.
The government’s support of a system where media enterprises post news with Google and Facebook, then demand payment, goes against every tenet of fair trade.
It is no different to having a newspaper delivered to your residence each day, without your permission, then being forced to compensate the news publisher for the delivery. Such a practice would make you incredibly angry.
Can you blame Facebook for threatening to stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram if the government moves ahead with legislating the code?
Google has also been lobbying against the legislation and could follow Facebook’s threat to switch off the ability of Australian media outlets to post their news feeds.
If this occurs, readership of quality Australian news stories will plummet, which has a direct impact on the checks and balances required in our society.
The Australian government’s clumsy attempt to legislate the collection and distribution of news reinforces that it is struggling to understand or manage the technological changes in areas such as cryptocurrency, online shopping, digital profiling, internet security, social media and, of course, the loss of Australian media content.
There are long-term solutions the government could pursue, other than introducing an anti-capitalist law aimed at Google and Facebook.
These include introducing a digital advertising tax, with some of the revenue going to the Australian Broadcasting Corporation to boost its national reach, local content, and investigative journalism capabilities.
Also, businesses such as NBN, Telstra, Optus, TPG, and Vodafone, which provide the digital interface between content sources and internet users, could provide a percentage of their revenue to support commercial news content that serves the public interest.
This should be designed to bring about changes in the business models of digital interface providers, so more of their revenue is sourced from major international content suppliers rather than Australian internet consumers.
As the government tackles the myriad digital technologies laying waste to business-as-usual, it must start developing new foundations for the services deemed to be in the national interest, before the fourth industrial revolution bypasses its ability to have any influence on our nation’s future.
• David Kobelke spent 15 years managing CCIWA’s Australian industry participation unit
