It reads like a coroner’s report on the news sector, 623 pages filled with tables and graphs detailing the devastating decline in local news and public policy reports over the past decade. It landed on the Australian Prime Minister’s desk last summer, unnoticed by most news consumers in America and around the world.
But the Australian regulators’ report left no doubt about what they see as the cause of the disappearance of local journalism – the almost monopolistic power of Google and Facebook. And it sparked a chain of events that could shift the balance of power between big tech and news at a disastrous time for journalism.
“Global tech companies don’t go beyond national laws, especially when there are so many issues at stake,” Rod Sims, president of the Australian Competition and Consumer Commission and author of the report, texted me. weekend on WhatsApp.
Sims and Isabelle de Silva, a like-minded regulator in France, dispute a universally accepted fact on the Internet: that Google and Facebook can distribute content created by news organizations without directly paying organizations for their creation. Last month, as the coronavirus bankrupted hundreds of publishers worldwide, the Australian government instructed Sims to force platforms to negotiate payments with newspaper publishers – making it the first country to do so.
Mr. Sims, a pugnacious 69-year-old who has spent a large part of his career tangling with railways, ports and telephone companies, sees the echoes of these classic monopolies in this battle: “Platforms digital media need media in general, but no media in particular business, so there is an acute imbalance of negotiation in favor of platforms. This creates a significant market failure that harms journalism and therefore society. “
In France, where regulators are demanding that Google cut a deal to pay publishers, the pandemic crisis added “all the more urgent,” said Ms. de Silva, the president of the French Competition Authority, which applies a change from the European Commission to copyright law which will soon take effect across the continent.
Players of all stripes predict that Australian and French decisions will set global precedents. Leaders of Ireland and Malaysia have indicated that they are paying attention. And in the United States, where antitrust laws are weaker and regulators have been more laissez-faire, hungry publishers are licking their chops.
“It is quite nice to watch the dominoes fall,” said Danielle Coffey, general counsel for the News Media Alliance, which widely represents American newspapers.
The battle between platforms and publishers is both a matter of economic principle and an old-fashioned political fight between powerful industries. For a decade, the transformative power of technology, its glamor and its huge lobbying expenses allowed it to dominate, which resulted in a system in which platforms could present and take advantage of the content that publishers of news create without paying them directly for it.
But the power of the press, even today, makes it a formidable political force. Rupert Murdoch’s Australian Hand-Held News Corpus – largely hated by his most distinguished and progressive global peers – has long led the fight to recoup tech giants’ incomes and hostility to Google is bleeding through the Times of London and Fox News. (Mr. Sims said he had never spoken to Mr. Murdoch, although a spokesperson confirmed that News Corp had made recommendations for investigation.)
While most American media reject the idea of crusading its pages to support the business agenda of its publishers, most of the country’s news managers share a point of view on the platforms, having seen take advertising dollars from the information sector and propagate disinformation at the expense of professional journalism. And even if the platforms employ armies of powerful lobbyists, politicians remain eager to please the press that covers them.
“All governments are sensitive to the media in one way or another, because in all countries, the media is the filter through which things are seen,” said Sims.
Facebook and Google have approached the new regulatory aggressiveness differently. Facebook, after taking a huge public coup for its role in amplifying misinformation and disseminating user data in the 2016 election, has decided to give publishers what they want: money, mostly. The company started its news tab last October by writing seven-digit checks to publishers in exchange for three-year license agreements. Facebook’s attempts to make amends have resulted in Mark Zuckerberg being subjected to a stage interview with a triumphant News Corp CEO, Robert Thomson, who started out by asking funny, “What took you so long ? And the editors thought Facebook had legitimately started to solve an important problem by paying news agencies for their work.
Google has played politics differently and, until now, much less skillfully. The company has taken a condescending approach to publishers, led by former Gray Bearded Salon Director Richard Gingras, who for years has delivered the same set of talking points to more and more news managers furious over the nature of the truth and the true value of the Internet – as if the year was still 2003. And while Facebook pays publishers directly, Google has mainly distributed grants for experimental journalism projects built around technology from Google.
Thomson, in a veiled shot on Google during a News Corp conference call last week, accused him of trying to create “a system of small patronage, through false philanthropic documents and sentient rules, apparently designed to institutionalize begging media. ” (Mr. Gingras did not respond to a request by email.) And Google’s temporary grants to news organizations seem to follow a pattern: the company is more generous when it feels most threatened by regulation.
Google maintains that it offers value to publishers by driving traffic.
“I want to debunk a meme that I heard that we don’t pay or provide real value,” the company’s vice president of press products, Brad Bender, told me in a telephone interview. adding that “news” of the type that Google often aggregates “is not a major source of income for news publishers” as they sell advertising for things like cars and fashion.
But politics have changed dramatically in the past few years, and Google’s proud challenge and technology conferences now appear to be a mixture of arrogance and naivety. And, perhaps showing the virtues of Facebook’s more conciliatory approach, the social media giant has also succeeded in France, for now: Facebook maintains that the voluntary publications of its users on social media are intrinsically different from the way a search engine scours the web, and negotiate to pay publishers, thus far avoiding the heavy hand of Ms. de Silva.
“We found Google’s argument that they would never pay any form of payment for non-lawful content,” de Silva told me in a telephone interview about her efforts.
Google executives believed they had found a way to dodge European regulations when in Spain in 2014, they simply removed Google News from search results rather than responding to claims from regulators. But, in a sign of how things are going, when they attempted a similar maneuver in response to new French regulations requiring payment for “extracts” from news protected by copyright, Ms. de Silva jumped, holding the company to take or leave – this approach was in itself an abuse of market power.
“We looked at what happened in Spain,” she said. “It’s not really an avenue open to them because in our decision, we asked them to keep the content as it is today. “
Now Facebook is negotiating with French publishers to introduce a version of the program it has deployed in the United States, and Facebook executives have told me that they will also extend this approach to other markets. The company hopes to “work with governments to help news publishers build sustainable business models,” said news director Campbell Brown in an email.
There are signs that Google’s strategy is changing. The company is in talks with some publishers in the United States and France to pay directly to “publish full articles” on Google itself, without having to click a link, according to a Google employee who spoke only on condition of anonymity because negotiations are underway. (Talks were first reported in The Wall Street Journal.) But French publishers are reluctant to the idea of a new product in favor of a payment request for the use of their content on the main pages of Google’s search results. News Corp’s Thomson said in his call for results that he saw “early warning signs” of a “more enlightened and socially empathetic attitude toward journalism” from Google chief Sundar Pichai and its parent, Alphabet.
European copyright negotiations have taken a long time and are taking place reliably in the legal systems of the continent. De Silva says Google has until August “to negotiate in good faith” with publishers to pay for content, and that Germany is expected to move in the same direction by the end of this year. The situation in Australia seems to be changing more quickly and less predictably. Sims is expected to submit a draft code, including a content rating system, by July.
Mr. Sims and Ms. de Silva alone cannot save an information industry that is still struggling to meet consumers wherever they are on the Internet. Some publications are sustainably dependent on the print media, and others have styles of communicating and reflecting on news and income dating back to the newspaper age. At worst, forced payments from platforms could simply support the disappearance of newspapers at the expense of new ways of telling stories and doing business.
But at this terrible time, the information world is starting to win political battles. Platforms have started to realize that if the news is not as popular as pictures of babies or celebrities, it is the politicians in the industry who care most. The politicians who matter, at least, who are less and less here in the United States.