Facebook and Google are in open opposition to draft legislation in Australia that would give the country’s media organisations more power to secure payment for the use of news content – it’s part of a wave of stories showing how governments are beginning to respond to the giants’ might.

Why it matters: Regulation has lagged behind the fast-moving, lightly-regulated world of big tech, two of whose denizens – Google and Facebook – now lie at the core of most countries’ media ecosystems. But with a draft proposal that takes the lessons of previous attempts to reign them in, Australia’s move comes at a moment of high trust in its government following a strong response to COVID-19.

The proposals: Any proposals that can prompt dire warnings from the duopoly that it would have to block the sharing of news stories, in the case of Facebook, and cut off services altogether, in Google’s case, are worth exploring.

Outlined by the Australian Competition & Consumer Commission, the draft code – which could come into force before the end of the year –
aims to address what it calls “acute bargaining power imbalances between Australian news businesses and Google and Facebook”.

It does so by allowing news organisations to collectively bargain with the platforms, rather than the title-by-title negotiations that happen now. If they are unsuccessful in their negotiations within three months, they will be able to request arbitration to determine how much Google or Facebook must pay. Additionally, Google and Facebook must notify publishers about algorithm changes that will affect their search ranking or data collection capabilities in advance.

Failure to comply could be punishable by a fine equal to a tenth of Australian turnover.

Will it work: Previous attempts to reign in platforms’ power haven’t been straightforward. In 2014, when Spain introduced legislation in which publishers could charge Google News for featuring a snippet of the publication, Google simply shut down the service.

The difference here is that Australia has learned from other countries in the balance of law and regulatory power.

Australia finds itself in a more trusted position following its government’s competent handling of the coronavirus pandemic in the country. It’s likely that responding with threats won’t win Aussie hearts. But both companies are extremely important to businesses large and small in the country, meaning that an exit would have negative repercussions should the government call either company’s bluff.

Nothing is simple: Part of the defence strategy for the titans will lie in pointing to other centres of power, not least Rupert Murdoch’s News Corp, which enjoys a dominant position in that market, and whose sympathies toward the ruling party could be said to be all too convenient.  

Ultimately, the lessons from the story point to a development of tech regulation that is subtler than law changes, and stronger than a variably funded regulatory body. Both work in tandem, similar to solutions laid out by the UK’s Competition and Markets Authority following a deep dive into both company’s hold on the British digital advertising market.   

Sourced from the ACCC, The Conversation, WARC