Australia vs Big Tech (2): The International Implications
As we previously examined, Australia has decided to go ahead with its regulatory proposal, which forces Google and Facebook to pay publishers when they publish news content on the two platforms. Unsurprisingly, the digital platforms opposed this proposal, with Facebook retaliating by blocking its news services in Australia, though the Aussies refused to back down. Recent reports that EU, Canadian and UK lawmakers are considering similar legislation indicate that Big Tech may be losing this battle. This article will look at previous attempts to regulate the news content of Big Tech, and examine the potential effect of the Australian proposal in other jurisdictions.
Traditional news publishers from various jurisdictions have been trying, unsuccessfully, for years to force tech platforms to pay them for publishing their news content on their platform. In the US, the demands of publishers for legislative intervention have been largely ignored by law-makers for more than a decade. In Europe, attempts to force Google to pay for news content by utilising copyrights have been largely unsuccessful, as the courts have consistently found that the reproduction of headlines or a few sentences from articles will rarely amount to copyright infringement.
Digital platforms and traditional publishers have a mutually beneficial relationship, and the indirect benefit that digital platforms provide to news publishers, became apparent when in 2014 Spain attempted to enforce a copyright levy on digital platforms. Instead of paying, Google simply closed its Google news service in the country to avoid any liability. Google’s action caused a 10% drop in the traffic of Spanish news sites, eventually forcing the Spanish government to back down amid calls from news publishers themselves to restore the market to its previous form.
Similarly, when France tried to implement the 2019 EU Copyright Directive, which provided publishers with the right to demand payment for the use of news 'snippets', Google simply limited its search results to headlines, avoiding the need to strike licensing deals and any obligations to make payments to publishers.
Yet, the recently proposed Australian News Media Bargaining Code seems to address the inadequacies of previous attempts, as it can be enforced easily by the relevant authorities, due to its clarity and focus. The Code’s detailed and wide-ranging provisions would make it difficult for digital platforms to circumvent its provisions through recycling their previous tricks, as the Australian lawmakers clearly had those tricks in mind when drafting the Code, and made sure to exclude them.
Google and Facebook openly lobbied against the proposed legislation, despite the estimates of experts that the proposed law would only have a minor financial impact for the tech giants. Nevertheless, their fight with Canberra could have serious consequences, because the potential implementation of such a law would create a precedent which other jurisdictions may wish to follow.
The digital platforms claim that various aspects of the proposed Code are unfair. Especially problematic for them, is the additional scrutiny that they will face when deciding which news publishers they reach agreements with. Accusations of bias and conspiracy suspicions, already prevalent throughout the world, will only increase when the big tech giants have to justify why they reached an agreement with a certain news publisher and not with another.
Faced with such problems, Google initially threatened to withdraw its search service from Australia, but it has now, begrudgingly, started its preparations to comply with the proposed Australian Code. Facebook, however, did not just make similar threats; it went as far as banning Australian-published news content from its platform. This move quickly backfired, when it was discovered that they had unintentionally restricted the ability of charities and government institutions to post on Facebook. This alerted governments around the world to the possibility of being silenced by a disagreeing Facebook, and gave further ammunition to those arguing for more regulation.
Australian officials responded to Facebook's ban by stating that the nation would not give in to such coercion attempts, and they would not back down. The heavy-handed threats and actions of Google and Facebook seem to have failed spectacularly, as the approach adopted by the digital platforms only drew more attention from lawmakers around the world, while they made obvious their monopolistic and uncompromising attitude.
This is especially so when comparing the speed and decisiveness of Facebook’s decision to block Australian news articles from its platform, with its hesitant approach to stopping the spread of misinformation and conspiracies. Facebook claims to support and encourage freedom of speech, but it had no qualms about restricting access to credible information when that would allow it to avoid paying traditional media and journalists. A deal between Facebook and the Australian government was reached a few days after Facebook's block, by which Facebook restored the ability of Australian news publishers to post their articles in exchange for minor procedural concessions in the law. Yet, lawmakers around the world had already taken notice of the dichotomy in Facebook's actions, and the public perception of Facebook has suffered as a result of its actions in Australia.
Inspiration for other jurisdictions
Recent reports suggest that other jurisdictions are also considering imposing similar measures. Canadian law-makers have openly expressed their desire to adopt a similar law. In the UK and the EU, aspects of the Australian proposal are believed to be already incorporated into existing draft legislation.
The European Parliament is currently drafting two regulations concerning digital platforms, the Digital Services Act (DSA) and the Digital Markets Act (DMA), both of which would strengthen the regulation of Big Tech. Lawmakers are presumably considering amending these regulations so that they include even more aspects of the Australian proposal. EU lawmakers are especially contemplating the inclusion of the binding arbitration process and the requirement to inform publishers of the placement of their articles on Google’s search results page and in Facebook’s homepage.
EU parliamentarians admit that the amendments were inspired by Australia’s proposal and they agree with the reasoning of the Australian lawmakers. As a Maltese MEP acknowledged in her statement, the big digital platforms currently enjoy a dominant market position which creates huge bargaining power imbalances, preventing news publishers from reaching fair agreements with them regarding the dissemination of their work.
The potential widespread adoption of similar laws could force digital platforms to operate under this new regime, obliging them to pay traditional media companies to use their content. The enactment of a similar law by the EU could be a game-changer in the fight between governments and digital platforms. Google and Facebook are unlikely to withdraw their services from the EU, UK and Canadian markets, as that would be destructive to their business. Thus, the endorsement of the Australian proposal by all these jurisdictions, especially the EU, would signal a start to the end of the free reign of Big Tech.
Despite Facebook’s controversial decision to block news content in Australia, and Google’s initial threats, the widespread adoption of similar legislation in other countries would leave the digital platforms with no option but to pay up. Although the proposed law could significantly alter the balance of bargaining power between digital platforms and news publishers, the financial effect for Big Tech may end up being minimal. The proposal does not include a pay-per link system, meaning that big tech companies could simply pay a flat fee to the publishers for their content, regardless of its success and popularity. The effectiveness of the proposal remains to be seen, and we have already covered many of our concerns regarding this in another article.
Nonetheless, the legislation will still provide an additional source of revenue to the struggling traditional media and journalism sector, whilst also signalling that big tech companies may be restricted in abusing their market power freely in the future.