Comment from Brad Smart

Am I a skeptic or have I just found myself out on a limb here?
 
I might be one of the few who feels that the legislation requiring digital news aggregators to pay Australian news content creators is a battle that may not be worth fighting at this point in time.
 
Make no mistake, I agree with the principle; those who bear the costs of researching, writing and publishing the news should make money from it if that content is reused.
 
But like our current showdown with China over different issues, we’re taking on competitors in Facebook, and more importantly, Google, that could have an unanticipated blowback, leaving our country far worse off.
 
From Day One, I’ve never understood the euphoria with which Australia’s media companies greeted the announcement of the ACCC’s draft legislation.
 
The unbridled optimism in media releases that there was always going to be a positive outcome for Australia’s news content creators, to me, seemed uncharacteristically naïve for companies, like Nine Entertainment and News Corp, both of whom have reputations as pretty tough street-fighters.
 
Even radio’s peak body, CRA, reported on the forthcoming legislation as though it was the ‘end of the end’; the deal had been done. Victory over the multi-national tech giants was at hand and cash would soon start flowing to even small regional radio operators. 
 
Maybe, that was just everyone rallying around the flag and showing a positive public face, while inwardly, holding the same sort of reservations I do. 
 
In reality, where we’re at right now, doesn’t look to me to be even the ‘beginning of the beginning’ as far as seeing Google or Facebook voluntarily part with a single dollar.
 
So, why did Australia’s media companies blindly expect that Big Tech was going to take this legislation lying down?
 
Did they really think these giant corporations were just going to roll over, see the error of their ways and happily share their profits around to those more deserving.
 
The argument behind the legislation is a good one and easy for politicians to sell. Whether those outcomes are workable is another issue.
 
If a local news organisation, whether it’s print, radio or TV, pays the salaries of the journalists who gather the news, why should someone else be able to come along, and cut-and-paste or link that product onto their own digital platform, without fair compensation.
 
Not only have these digital giants been accessing the news for nothing, but they’ve been collecting very healthy advertising dollars thanks to those, who click on the news stories, or watch or listen to various news bulletins via their browsers.
 
When your cost of sales doesn’t include paying for the product you’re providing, your profits are always going to be a whole lot bigger. Who wouldn’t want to operate with a business model like that?
 
I’ve always thought that the claim by Big Tech companies that they only provided a platform was complete rubbish.
 
They’ve regularly argued in courts in defamation cases around the world that they’re simply an independent technology platform, with no editorial position, and certainly, could never be construed as ‘a newspaper or publisher.’
 
In the past, this line has worked well for them and kept them out of lots of hot water, legally.
 
But, severe cracks of their own making have started to appear in this holier-than-thou argument in the past few months.
 
During the U.S. elections, regular reports emerged that Big Tech was allegedly using its market dominance to ban pro-Trump messages from being posted on their platforms, while at the same time, they were strongly supporting the Democrat line.
 
Many commentators have since claimed that this alleged censorship by Big Tech may have helped to sway the outcome of the election.
 
A lot of people may be happy with that outcome, but by banning content and opinion from the Trump campaign, nearly half of America’s voters were denied access to information from the candidate of their choice, and any negative information on the Biden campaign.
 
Now, even the Democrats have started talking about reining in Big Tech’s market power and breaking up these huge conglomerates, as the U.S. did with Standard Oil over a century ago. 
 
Regardless of your opinion of President Trump, these actions across almost all social media operators clearly demonstrates that the digital giants are, in fact, more than ‘just a platform.’
 
Now, Australia’s media organisations are about to feel the full impact of Big Tech’s sizable market influence.
 
I don’t know why our politicians and local media companies ever thought they, while standing alone in the world, could beat Google and Facebook into submission.
 
Perhaps, it’s that inherent Aussie idealism, believing that they’d see reason, and ultimately, give News Corp, Nine and other news creators, a fair go.
 
Unfortunately, you only have to look back at history in a ‘those who forget the past are bound to relive it’ moment to get the full picture.
 
When the Spanish government sailed its armada of legislation into the digital space back in 2014, it was demanding pretty much the same thing from the big digital news aggregators as Australia is now seeking. 
 
Google quickly resorted to the Nuclear Option.
 
Taking the high moral ground, Google slammed the door shut on Spain’s access to its Google News service, closed its local operations and blamed it all on the Spanish government. 
 
Within a year, Spanish publishers had reported losses of around $14-million, most of that burden falling on Spain’s smaller publishers. 
 
Google’s knee-jerk reaction reportedly resulted in massive job losses for journalists and some news publications were forced to shut down.
 
Other publishers ran for the hills, closing their operations in Spain and moving their bases to other countries, so they could get back online with Google’s search engine.
 
Almost the same thing happened in Germany.
 
German publishers and broadcasters wanted Big Tech to pay for news content and their government agreed.
 
Although the legislation became law, it provided a loophole for publishers and broadcasters to be able to do their own deals for their content.
 
Google again stood its ground when the negotiations started, resulting in a humiliating backdown by the country’s major news content creators, who had to sign onto a publishing deal for free, or be excluded from the search engine. It was nearly Versailles revisited!
 
When some publishers took a tougher line and put conditions on the use of their content, the tech giant unfavorably restricted how their content was displayed. Clearly, the message was ‘don’t screw with us.’
 
The then-German Consumer Protection Minister described Google’s approach as ‘this monopolist’s freeloading mentality.’ I guess that was just ‘sticks and stones’ as far as Google was concerned, because it had already got its own way.
 
If you think these plays are a disturbing use of market power, you’re not alone, as we’re now discovering in Australia.
 
In March 2019, Europe passed the Pan-EU Copyright Reform Law, protecting authors, journalists and publishers.
 
This new law now gives all EU countries greater protection against the market-might of the tech giants. It sends them the message ‘if you want to play in our pond, you’ll play by our rules.’
 
Before this law, it may have been easy pickings to batter German news groups and broadcasters into submission, or tighten the thumbscrews on Spain. Now, when Google or Facebook or other social media outlets see themselves taking on the combined might of the EU, that’s an entirely different matter. Taken as a whole, Europe is an important revenue stream for the tech giants, so this new law tends to balance up the playing field a little.
 
Last year, in the midst of the pandemic, France became the first country to stand up for its news outlets under this new European-wide law.
 
However, Google and Facebook aren’t run by dummies.
 
They’re smart enough to see that a company’s market power can no longer be used to just brow-beat individual countries in Europe, when they’re now all protected by a common copyright law.
 
Google has now agreed to pay around $A100-million into a fund to be divided amongst all of France’s news content providers. In reality though, for Google, that amount represents little more than a tip! 
 
Australia, however, is not in a position to wield any real power against the tech giants. To all intents and purposes, we’re out here standing alone and completely naked.
 
As a country, we’re less than a few percent of the world in terms of economy, influence and market importance, so we have to be very careful who we choose to stand up against, when it comes to a matter of principle.
 
Trying to get tough with Google or Facebook locally could see Google and Facebook’s market power being wielded against everyday Australians, not just the country’s news creators.
 
If you thought Covid made life tough, think about doing business or research for radio gigs in the short term, without access to Google.
 
With the recent Australian Senate Inquiry, the rabbit hole seems to be getting deeper and deeper as both sides dig in.
 
Tech giants aren’t easily intimidated by Australian government laws. In fact, I believe, in many ways, they hold our laws in contempt and are quite happy to demonstrate it, to pull us into line when they think it’s necessary. 
 
In the inquiry, Google wasted no time waving around the Nuclear Option they used in Spain, and threatening the federal government with a withdrawal of all its services from the entire country. 
 
They’re smart operators!
 
They know how unpopular the loss of Google would be amongst ordinary citizens and small businesses, and they’re aware of the leverage it gives them in forthcoming negotiations, during a potential election year.
 
Ordinary people see this fight as elitist – one that only stands to benefit the few, at the expense of the many.
 
It’s a very smart tactic on Google and Facebook’s behalf, but nobody can say it wasn’t expected. They’re tough street-fighters too, and it’s clear, they don’t take prisoners.
 
In the end, I suspect there will be something in the kitty for Australian news creators, but it’s likely to be a long way short of the expectations of local news content creators, like News Corp and Nine.
 
Small-time players, like regional radio stations, are likely to miss the boat altogether.
 
Long before we’ll see a final outcome, I feel those backroom dealings will result in the abandonment of many of the provisions of the ACCC’s original legislation, not necessarily by the government, but by pragmatic industry players.
 
The only way I can see Australian publishers and broadcasters having a genuine win on this issue, is if we, Australia, can find a steadfast ‘big buddy’ to stand beside us in any negotiations with the tech giants.
 
An obvious choice would be the Biden administration, but right now, I think it owes Silicon Valley far too much.
 
 About the Author

Brad Smart previously owned and operated the Smart Radio Network through regional Queensland.

He sold his stations to the then Macquarie Radio Network.

He has been a journalist, broadcaster and film producer for over 30 years.

Brad is available as a freelance writer, voiceover talent and consultant.

Brad’s articles and podcasts are also available through his website www.bradsmart.com.au 

Subscribe to the radioinfo podcast on these platforms: Acast, Apple iTunes Podcasts, Podtail, Spotify, Google Podcasts, TuneIn, or wherever you get your podcasts.