Battle Lines Harden Over Australia's Proposed Media Code

  • by February 4, 2021
Australia is weighing whether to go ahead with a plan to require tech companies to pay publishers for their journalism, stirring debate over who benefits most from shifts in media spending.

The rhetoric has heated up in the past few weeks, with Google and Facebook threatening to curtail ways for Australians to see news content on their platforms.

Seeing an opportunity to boost usage of its Bing search engine, Microsoft has stepped in to praise the Australian government for its proposed law to require companies that aggregate news to negotiate payments to publishers.
“While other tech companies may sometimes threaten to leave Australia, Microsoft will never make such a threat," Brad Smith, president of Microsoft, said in a Feb. 3 blog post. "We are committed to supporting the country’s national security and economic success.”

Of course, Microsoft makes most of its money from sales of software and cloud computing services, rather than advertising. The company has its own checkered history with antitrust authorities that pre-date Google and Facebook's existence.
Australia may provide a model for other countries considering ways to rein in the dominance of Google and Facebook in online advertising. Facebook finished 2020 with a 21% gain in ad revenue to more than $84 billion, while Google's ad sales rose 9% to $146.9 billion, despite a brief decline in the second quarter amid pandemic lockdowns. Google and Facebook thrived while the broader advertising market contacted, according to estimates compiled by Research Intelligencer.
In the United States, newspaper organizations have argued that publishers should be allowed a temporary exemption from antitrust laws to engage in collective bargaining with technology companies to pay for news. The News Media Alliance last year published a white paper arguing that Google had abused its market power and hurt journalism.
News Media Alliance President-CEO David Chavern this week expressed his support for Australia's proposed media code in an op-ed that also criticized Google and Facebook for a lack of transparency.
“The platforms are completely nontransparent about the economic value they receive from their control of news content, and any estimates usually overlook the value of the data collected," he writes in The Australian. "Every time Google or Facebook cites a figure — such as the supposed value of traffic they 'deliver' — they should also be required to show exactly how the number was calculated. The result is that Google and Facebook are strangling news publishing everywhere.”
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