This month, France and Australia filed antitrust actions against Google and Facebook that are more muscular than past efforts to challenge the tech giants to pay publishers for re-use of articles and photos.
Publishers have had little leverage against Google, a trillion-dollar company, and Facebook, a half-trillion-dollar company with 2.5 billion users worldwide, so these national government actions on their behalf may even the scales.
France’s action relies on new European Union digital copyright directives, while in Australia, Treasurer Josh Frydenberg has used long-standing antimonopoly law to declare Google and Facebook abuse their power over marketplaces in which they operate. Both countries’ officials have said publishers will be paid and have ordered Google and Facebook to negotiate with publishers. Australia set a July deadline.
While it’s too early to say this is the month the news business turned the tables on Google and Facebook, these are important milestones.
“What it indicates is there’s a worldwide acknowledgment that quality journalism is important and that the digital ecosystem as it’s currently configured is not rewarding the creation of quality journalism,” said David Chavern, CEO of the News Media Alliance, the newspaper industry’s lobbying arm. “We need a new set of arrangements if we want reliable news and information to exist.”
When France announced its order April 9, Richard Gingras, Google’s vice president for News, protested characterizations of Google as an unfair competitor. Google has been “engaging with publishers to increase our support and investment in news,” he said at the time. “We will comply with the (French) order as we review it and continue those negotiations.”
This battle over fundamental market conditions might seem theoretical at a time when most newspapers are focused on meeting next week’s payroll. But the pandemic-driven collapse of the news business ad revenues during a time of record readership illustrates the publishers’ case. Local journalism appears to be simultaneously necessary to the public and a casualty of market economics.
Both Google and Facebook have shrugged off past efforts to get them to pay for the content they use, the question is whether this round is any different.
“France changed their copyright law,” said Sarah Ganter, a Simon Frasier University professor who studies the relationship between the news business and Google and Facebook. “Google will still resist and try to bargain, but for the government there will be more basis for punishment.”
She said both the French and Australian statements have sounded more aggressive than past efforts to her.
When Spain enacted a new copyright regime in 2012 and told Google to pay publishers for excerpts and snippets served up to users, Google shut down Google News in Spain rather than pay.
“What Google said was ‘If you don’t want to be on Google … you will disappear,’ ” said Nikos Smyrnaios, a professor at University of Toulouse (France) who studies the impacts of big tech. “Today in France, Google is implementing the same strategy.”
Google’s spokesperson replied to questions about France’s decision by emailing a copy of Gingras’ statement and lists of Google’s efforts to keep the news business afloat during the pandemic and to teach news companies how to capture traffic-based revenue.
Facebook did not respond to requests for comment for this report.
Smyrnaios said the big platforms face a different challenge this time. All 28 EU nations are enacting a standard set of copyright protections adopted one year ago by the European Council, and he said the French press is more united.
The Australian approach, relying on antimonopoly laws, is more complicated than France’s, Chavern said. The Australian decision to force payments to publishers followed a two-year investigation by the Competition and Consumer Commission (ACCC), which found Google and Facebook’s control of digital advertising tools and the ad marketplace has prevented publishers from getting paid for the content they create. It also tackled questions of data-sharing and the secrecy of Google’s search algorithms, which decide how much traffic Google sends to a publisher’s work.
The Commission also said digital platforms’ algorithms have altered the incentives for news production, leading to decreased coverage of courts, local government, public health and science.
“We won’t bow to their threats,” Australian Treasurer Frydenberg said at a news conference about Australia’s challenge. He expects Google will resist.
“We are not seeking to protect traditional media companies from the rigor of competition or technological disruption,” Frydenberg wrote in a Tuesday Op-Ed piece in The Australian newspaper. “Rather, to create a level playing field where market power is not misused, companies get a fair go and there is appropriate compensation for the production of original news content.”
Though Frydenberg says talks were pointless, Google’s spokesperson says it has negotiated in good faith with Australian publishers, even if it has not agreed to publishers’ demands.
“We’ve worked for many years to be a collaborative partner to the news industry, helping them grow their businesses through ads and subscription services and increase audiences by driving valuable traffic,” an emailed corporate statement said. “We have sought to work constructively with industry, the ACCC and Government to develop a code of conduct, and we will continue to do so in the revised process set out by the Government.”
Google contends it sent more than 2 billion clicks to Australian news publishers from Australian users in 2018, and that it’s up to publishers to monetize those visits through subscriptions and advertising.
Chavern said Google and Facebook control traffic. He said the current battle is nearly identical to what music publishers had to go through to ensure payment by radio stations and TV producers had to go through to be paid by broadcasters
“What people never anticipated is that digital audience would then be primarily controlled by two companies,” he said. “Politicians are basically coming to the point of view ‘I need this information to continue to be produced. The distributors are not returning value back. We need a new deal.’”
Australian Competition and Consumer Commission findings about Google and Facebook:
• Digital platforms actively participate in the online news ecosystem are considerably more than mere distributors or pure intermediaries in the supply of news content in Australia.
• The availability of a wide range of high quality news and journalism provides significant benefits to Australian society and is important for the healthy functioning of democracy.
• Google and Facebook together account for nearly two-thirds of online advertising expenditure.
•The total number of people in journalism-related occupations fell by 9%, but the fall in traditional print (now print/online) journalist numbers was 26%.
• The online media environment provides relatively poor incentives for news media businesses to produce journalism that may attract smaller audiences, regardless of such coverage’s contributions to the public interest.
• More than 100 local and regional newspapers have closed throughout Australia in the past 10 years, and the total number of these publications declined by 15%, leaving 21 local government areas without coverage by a local newspaper.
• Virtually no media regulation applies to digital platforms in comparison with some other media businesses.
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