A tussle between Australia and Facebook over News Charges

Synopsis: Recently, a clash erupted between the Australian government and Facebook. The big Techs in Australia are opposing the Fee to media companies for using their content.

Background

  • Recently, the Australian government has proposed the ‘News Media and Digital Platforms Mandatory Bargaining Code Bill 2020’.
  • The bill aims to make Google and Facebook pay to media companies for using their content.
  • It also proposes for an arbiter to decide the payments. It is important because small publishers have no bargaining power against Big tech companies.
  • Facebook has retaliated with a news blackout. It blocked all the news links on its platform. In this process, it also ended up blocking out emergency services such as weather forecast, rescue operation, news related to health, etc.
  • In response to this bullying action by Facebook, Australia’s Prime Minister has sought global diplomatic support for forcing Internet giants to pay media companies.
  • In this context, he also contacted Indian Prime minister Narendra Modi and Canada’s Prime Minister Justin Trudeau to discuss the progress of media platform bill.
  • The legislation sets a precedent in regulating social media across countries.

Why the government resorted to draft a bill for this purpose?

  • In 2017, the Australian Competition and Consumer Commission (ACCC) recommended a voluntary code for internet companies. It was to balance the negotiating power differential between major digital platforms and media businesses.
  • However, the businesses were not able to reach an agreement voluntarily. This prompted the government to legislate a mandatory code.

Why internet companies are reluctant to accept this bill?

The basic argument of both companies is that,

  • The media industry is already being benefitted from the traffic routed to them by the digital platforms.
  • Also, they are of the opinion that the proposed rules would expose the Internet companies to unseen levels of financial and operational risk.

How it is regulated in other countries?

  • Both the platforms Facebook and Google aim to formalize payment pacts with news companies in several other countries.
      • For example, Facebook plans to launch its news tab feature in the US and in the UK, with likely tie-ups with The Guardian, The Economist, and The Independent.
      • Whereas Google has planned to roll out its news offering platform, Google News Showcase. It 450 publications on board in a dozen countries.
  • Similarly, Google has accepted to pay news publications in France for using their content online.
  • Even in Australia, Google has opted for a more conciliatory position by signing a deal with Rupert Murdoch’s News Corp. Whereas, Facebook has resorted to retaliation. 

Why internet companies are having double standards with respect to different countries?

  • Paying for a news feed is not an issue for the tech giants. They have already accepted to pay News publications in France.
  • But the fight in Australia is over, how much control these companies would be able to retain on their pay-out process and on operational aspects. For example, the power to decide the payments for news feed sources, revealing changes in their algorithms, etc.,
  • European laws have specifically linked payments to copyright, without any pressuring features into the agreements. Whereas Australia’s code is entirely focused on the bargaining power of news outlets and has some coercive features.

What is the status in India?

  • According to a FICCI-EY report for 2020, there are 300 million users of online news sites, portals, and aggregators in the country. It comprises around 46% of Internet users and 77% of smartphone users in India at the end of 2019.
  • Also, India is the second-largest online news consuming nation after China. This has increased the revenue for aggregators, news publishers through digital advertising.
  • For example, according to EY estimates, digital advertising spends in 2019 grew 24% and is expected to grow to Rs 51,340 crore by 2022.
  • Despite huge prospects, a substantial discussion on this issue is yet to begin in India.
  • In India, Daily hunt and In Shorts are the other major news aggregators. They are yet to find a sustainable revenue model to make payments to publishers.

Regulating tech giants in India- Explained

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