By Ben Smith
It reads like a coroner’s report on the news business, 623 pages filled with charts and graphs detailing the devastating decline in local news and public policy reporting of the past decade. It landed on the Australian prime minister’s desk last summer, unnoticed by most news consumers in America and around the world.
But the report by Australian regulators left little doubt about what they see as the cause of local journalism’s demise — the near monopolistic power of Google and Facebook. And it has set off a chain of events that could shift the balance of power between big tech and the news at a dire moment for journalism.
“Global tech companies are not beyond national laws, especially when there is so much at stake,” Rod Sims, the chairman of the Australian Competition and Consumer Commission, and author of the report, texted me this weekend on WhatsApp.
Sims and a like-minded regulator in France, Isabelle de Silva, are challenging a universally accepted fact of the internet: that Google and Facebook can carry content created by news organizations without directly paying the organizations for creating it. Last month, as the coronavirus put hundreds of publishers out of business around the world, the Australian government instructed Sims to force the platforms to negotiate payments with newspaper publishers — making it the first country to do so.
Sims, a pugnacious 69-year-old who has spent much of his career tangling with railroads, ports and phone companies, sees echoes of those classic monopolies in this battle: “The digital platforms need media generally, but not any particular media company, so there is an acute bargaining imbalance in favour of the platforms. This creates a significant market failure which harms journalism and so, society.”
In France, where regulators are demanding that Google cut a deal to pay publishers, the pandemic crisis has added “all the more urgency,” said de Silva, the president of the French Competition Authority, which is enforcing a European Commission change to copyright law that will soon take effect across the continent.
Players on all sides predict the Australian and French decisions will set global precedents. Leaders from Ireland to Malaysia have indicated they’re paying attention. And in the United States, where antitrust laws are weaker and regulators have been more laissez-faire, starving publishers are licking their chops.
“It’s kind of neat watching the dominoes fall,” said Danielle Coffey, the general counsel for the News Media Alliance, which largely represents US newspapers.
Facebook and Google have approached new regulatory aggressiveness differently. Facebook has moved to give publishers what they want: money, mostly. The company began its news tab last October writing checks in the seven figures to publishers in exchange for three-year licensing deals.
Facebook’s attempts to make amends culminated with Mark Zuckerberg submitting to an onstage interview with a triumphant News Corp. CEO, Robert Thomson, who began by asking drolly, “What took you so long?” And publishers believed that Facebook had legitimately begun to address an important issue by compensating news organizations for their work.
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