The ACCC just can’t help themselves – to be fair they have been relaxing a lot of their anti-business regulations – they are still stuck with the notion that so-called big-tech is a problem.
ACCC chairman Rod Sims has vowed to intervene and force tech giants to share revenue with media companies struggling under commercial pressures exacerbated by COVID-19 if a deal can’t be negotiated in good faith.
This is the notion that Facebook and Google should pay media companies for the privilege of directing readers to those media company websites. Simply astonishing. If anything the legacy media should be paying the tech companies.
A contagion has threatened the very existence of mainstream commercial media for more than a decade and the COVID-19 pandemic has intensified its effect. Jobs are being shed already; 60 local and regional News Corp mastheads will suspend print editions after this week, iconic independent mastheads such as The Gawler Bunyip, Mildura’s Sunraysia Daily and Broken Hill’s Barrier Daily Truth have closed, job losses and pay cuts are hitting Seven West Media, Nine Entertainment, the Ten Network and elsewhere, and many media operations will struggle to survive the next 12 months.
The contagion has been the digital giants — especially but not limited to Google and Facebook — spreading media content more rapidly and widely than ever before but exacting a fatal parasitic price; sucking up most of the advertising revenue that used to sustain that same media.
Now I’m sure The Gawler Bunyip is a fine newspaper with a long and proud history and tradition and what-not. But time to call it a day. Call it an epoch if you will. I used to be served by two local newspapers. I am now well-served by two Facebook groups that provide me with all the local gossip and news that I require. To be blunt that isn’t even the model the ACCC is crapping on about.
But the argument being driven by NewsCorp – a large foreign multinational corporation – is weaker than they think. Here is Chris Kenny:
The ill-effects are widespread: a substantial public good is undermined as independent media voices are reduced; local, regional and national news and views are replaced by global and public sector perspectives; Australian jobs and businesses are destroyed; less tax is paid on our shores; and a grave injustice is perpetrated when global digital giants are enriched and empowered through raw material they have taken from Australian workers without compensation.
Understanding the scale of these companies is important. Google’s parent, Alphabet, has a market capitalisation of about $US750bn ($1.27 trillion). The entire federal budget could buy less than half the company, and before the latest market turmoil its value roughly equalled our GDP. Facebook is about two-thirds the size of Google. When these giants bargain with most media firms, Orcas negotiate with minnows.
One hesitates to point out that this is a well-known economic problem, with a well-known economic solution.
When different parties to a dispute have very different legal resources available to them (to be clear this is not obvious in this particular case) the argument goes that the stronger party will always win irrespective of the merits in each instance. The usual “solution” to this problem is either greater regulation or government ownership.
If we were truly worried about the ‘public good’ of an independent media then the government should establish a public entity for that purpose … oh wait.
As it turns out that ‘solution’ is itself problematic and Chris Kenny is one of the most consistent voices pointing out those problems.
It is very sad when old and venerable institutions die. But we shouldn’t stand in the way of evolution – even when it is disruptive. Local newspapers are dying – not because the tech giants are stealing their content – because social media is providing opportunities for people to enlarge the scope of their conversation from hearing distance to reading distance. Citizen journalists are displacing professional journalists.