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Google and Facebook vs Australia – Government wants tech giants to pay News Outlets for content

Google and Facebook vs Australia – Government wants tech giants to pay News Outlets for content


  • GS 2 || Science and technology || Information and Communication technology || Internet

Why in the news?

The Australian government tabled world-first media legislation with title ‘The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020’ in parliament that will force Google and Facebook to negotiate a fair payment with news organisations for using their content in Facebook’s newsfeed and Google’s search.

Significance of the proposed Bill:

  • To compensate for the loss of revenue of traditional media outlets: The new law seeks to address the loss of advertising revenue from traditional media companies to the digital behemoths.
    • It is estimated that for every $100 of online advertising spend, $53 goes to Google, $28 to Facebook and $19 to everyone else.
  • Fairness and justice: As the online advertising has consistently been generating revenues for the tech giants, the traditional media platforms are going broke despite their share in total revenue generation.
    • It is estimated that Google makes money from news and analysis provided by media organisations, and users would find Google and Facebook much less helpful if no news appeared on their feeds or in their search results.
  • To sustain public interests journalism: The asymmetric revenue issues arising out of the online content sharing has severely affected the journalists community.
    • Many journalists leaving the industry and media outlets going broke and closing.
    • The code aims to ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia.
  • Issue of fair competition: The Australian government had asked the competition regulator, the Australian Consumer and Competition Commission, to inquire into the impact of Facebook and Google on the state of competition in media and advertising at least three years ago.

Salient features of the proposed Bill:

  • Provision of negotiations: Media companies are encouraged to make commercial deals with Facebook and Google outside the code. But the code gives them a framework to bargain and reach a binding agreement.
  • Statutory Arbitrator: In case of disagreements, a statutory arbiter will implement the “final offer arbitration” model to determine the level of remuneration.
  • Time bound process: The digital platforms will have to give the media 14 days’ advance notice of deliberate algorithm changes that affect news media businesses.
  • Low cost of negotiations: To keep bargaining costs low for smaller companies, the digital platforms can make standard offers, or media companies can bargain collectively.
  • Stiff penalty: The new code also provides that in case of non compliance with the provisions, the tech companies will pay a penalty of $10m, or 10% of annual Australian turnover, or three times the benefit obtained, whichever is the greater.

Impacts of the new Bill:

  • On traditional media outlets: The recommendation was welcomed by media companies and advocates of public interest journalism.
  • On tech giants: The tech companies are rushing in to strike a compromise as they feared it would set a global precedent.
  • On public: There is no direct or indirect involvement of the public in any of the processes. The public won’t be aware of any differences.

Does India also need such a law?

  • In India, the issue of regulating online content sharing is still at scholar and intellectual level rather than at policy level.
  • The examples of other counters such as Australian and French laws which mandate tech giants to negotiate with local media firms to pay for displaying their content are being studied.
  • Some might argue that Facebook and Google should be treated like publishers, too as they now dominate the media sector in India and often facilitate the dissemination of offending content.
  • But since the internet is still at a growing stage in India, they have been regarded as open platforms, which allow any and all speech (different kinds of views/all shades of opinion) but can remove whatever they wish.
  • This approach affirms that Internet companies won’t be treated as the publisher or speaker of any information and won’t be held liable on account of any action voluntarily taken in good faith to restrict access to or availability of material.

Model Mains Question:

  1. Discuss the issues involved in the regulation of online media content? Do you think there is also a need to regulate online media content in India? Give reasons in support of your answer.