The Australian newspaper – a subsidiary of a foreign owned multinational corporation – has been in a dispute with Facebook – a foreign owned multinational corporation – and Google – also a subsidiary of a foreign owned multinational corporation.
The basic story goes like this – media companies like the Australian (but not the ABC, The Conversation, and the Guardian)* are old style platform companies that need to attract paying customers. Until recently those paying customers were advertisers, now they are attempting to pivot to have having consumers who actually pay to read their product. This is an important point – until recently the reader was the product being delivered to the advertiser.
But it turns out that new platform companies are so much better than the old platform companies. Media companies are struggling to survive. Rather than die gracefully, they have chosen to die disgracefully. Our ‘local’ media companies have run to Canberra for protection. Of course, Canberra have delivered protection via the ACCC.
Here is the deal – if these new platforms offer news type services and functions to Australians they will have to pay a
tax royalty directly to the legacy media company – but not the ABC or SBS. Of course this costs the media company nothing and therefore the royalty immediately inflates the media company’s bottom line where it can be taxed by the Australian government. This is simply a digital tax by another name. If this goes through the US government should immediately impose retaliatory tariffs on Australian goods and services or other sanctions upon Australia. That is what they have threatened the EU. Quite rightly so.
We have covered this story at the Cat over the past year or so.
But wait – the Empire strikes back.
Both Facebook and Google have promised to disable the news function on their platform in Australia. I’m so, so looking forward to them doing that. Yes it will be very annoying for me – I use the news search feature on Google quite a lot. But watching the ACCC and the Australian governments’ humiliation it would be a small price to pay. Mind you – I also have little confidence that will actually happen. Standing up to state-sponsored intimidation is not something big business does well.
Google and Facebook should hold out until Australian media are paying them to distribute their news stories.
Anyway – I digress.
This morning The Australian had a hit piece on Facebook.
Facebook infamously began life as a college project by Mark Zuckerberg for juvenile frat boys to rate the attractiveness of their female classmates. More than 15 years later, it’s now a global platform with an estimated 2.7 billion monthly active users.
“infamously”. Wow. Infamously. The Australian trying to cash in there. Who cares about the users? It has US$841.65 billion in market capitalisation. Not bad for a juvenile frat boy.
It could be argued, however, that Facebook never truly grew up.
It could be – but not by you. News Corp has a market capitalisation of US$8.92 billion. Now don’t get me wrong – I’m a huge fan of News Corp.
But there’s an ugly side, hiding in plain sight. Facebook is awash with conspiracy theories and downright misinformation, from relatively minor gossip through to dangerous lies about COVID-19.
Oh dear. Journalists never, ever repeat conspiracy theories and downright misinformation? This is considered so integral to the business of journalism that the Australian government pays $1 billion per year to create an entire media organisation for the very purpose of disseminating conspiracy theories and downright misinformation.
Despite being a company worth nearly $1 trillion with more than 50,000 employees, Facebook has proven time and time again it’s unable to effectively police fake news on its platform. And yet it says it can turn off real news with the flick of a switch.
Ah yes. I’ve seen this lefty talking point all over, ahem, social media in the last few days. It be clear – Facebook and Google can turn you off. Preventing people from talking is difficult. Preventing them linking to a known source is easy.
It says much about Facebook’s values that it would rather shut down news altogether rather than agree to pay a fair price for it.
So said every statist in human history when pleading for special privilege. Boo Hoo. More seriously – Facebook and Google are adding value to the traditional media. They should be paying Facebook and Google, not vice versa.
Well resourced, paywalled publications like The Australian will be fine, given their loyal readership.
Time will tell. I suspect so – but not if you keep serving up crap like this.
But other small, independent outlets will suffer. Those companies, which rely on Facebook and Google clicks to drive digital advertising, will be decimated.
“Hi Alan – just calling to tell you that I’m not worried about myself. But it is the other, the vulnerable who will suffer. I’m doing it for them.” Seriously? This is why the media get into trouble all the time – they think we are stupid.
The US tech giants have been too powerful for some time, throwing their weight around and further dividing society with fake news.
Media company complaining about someone else being too powerful – having greater sway over their former consumers than they did.
Australia is not some irrelevant outlier on this issue, it’s instead an important test bed for how the tech giants should be treated by governments, and more importantly, voters.
This would be an interesting battle – alas I suspect we won’t get to see it. But how many Australians read a newspaper each day? How many Australians use Facebook and Google each day? How many Australians would care if The Australian newspaper stopped publishing? I would but I’m in a very small minority.
*My views on the ABC are well known, but as this is a long post already I’ll save my discussion of how the Conversation and the Guardian are Australian tax avoidance schemes will have to wait for another post.