Why are Google and Facebook worried about Australia?

Posted on September 1, 2020

 

A law change is being discussed in Australia that could change the way the country views and shares news online, and it has led to a bitter exchange between tech giants and the Australian Competition & Consumer Commission (ACCC).

The ACCC, an authority of the Australian Government, is drafting a plan to make major online firms pay news providers for content. The ‘News media bargaining code’, as it has been called, is due to be discussed in Parliament shortly, but the last couple of weeks have seen a backlash to the draft from two of the world’s biggest tech companies.

In mid-August, Google published an open letter to the Australian public, where it warned that such regulations would give undue power to major news companies, while also citing concerns about data security. The search giant followed this up shortly after with a question-and-answer article to lay out its reasons for being opposed to the idea.

In a blog post yesterday, Facebook went a step further. Will Easton, Managing Director for the social media platform in Australia and New Zealand, accused the proposal of “misunderstanding the dynamics of the internet”, and threatened to block Australia’s Facebook users from sharing news if the law change comes into effect. Easton stressed that this is not what Facebook wants to do, but he believes it will be a necessary step if the law is passed, arguing that it will hurt Australia’s news industry in the long run.

Debates have been rumbling for years about how tech firms use news, and whether they should compensate providers for doing so. Easton argues in his blog post that news is not a major revenue source for Facebook and accounts for only a small proportion of what people see on the site, but the ACCC has already responded by refuting this claim, noting that 49% of Australians have used Facebook for COVID-19 news, and it has labelled the statement “ill-timed and misconceived”.

What does this mean for businesses?

Should the proposal come into law, Australia would be the first major country to force tech giants to pay publishers for their news, and they will no doubt fear other countries following suit. Long-term, it may spell the end of businesses using their Facebook accounts to simply share industry news, and could mean that writing and researching their own news is a more profitable endeavour.

If you would like to get ahead of the game and reap the benefits of regular, high-quality content on your site, we can help you at Engage Web.

John Murray

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