No, Google should not prop up News Corp
As usual, the Australian government proves how utterly incompetent it is when it comes to regulating tech
With no idea how to compete with modern media, traditional news publishers are dying. To try and stop this, the Australian government has decided to try and force overseas companies to prop them up.
Last month, the Australian Competition & Consumer Commission (ACCC) published a draft mandatory code reported to give Australian media a chance to “bargain with Google and Facebook to quickly secure fair payment for news content”.
According to ACCC Chair, Rod Sims:
“There is a fundamental bargaining power imbalance between news media businesses and the major digital platforms, partly because news businesses have no option but to deal with the platforms, and have had little ability to negotiate over payment for their content or other issues.”
In response, Google has slammed a pop-up on its front page in Australia declaring that “the way Aussies use Google is at risk”. The pop-up links to Google's open letter to Australians opposing the News Media Bargaining Code:
“We need to let you know about new Government regulation that will hurt how Australians use Google Search and YouTube.
A proposed law, the News Media Bargaining Code, would force us to provide you with a dramatically worse Google Search and YouTube, could lead to your data being handed over to big news businesses, and would put the free services you use at risk in Australia.”
In a response published earlier today, the ACCC shot back, claiming that “the open letter published by Google today contains misinformation about the draft news media bargaining code”.
There is little doubt that Google needs to be regulated -- but not like this. This is not about Google -- it's about Big Media eliminating competition.
There are many reasons why traditional news media is dying. The traditional newspaper model that helped local journalism to thrive has been completely unbundled by websites like Craigslist that have wiped out the need for the 'classified' section.
Similar tactics have already been attempted in Spain, Germany, and France. And guess what? It failed, and revenue plummetted, because Google just stopped indexing articles from that country. It hurt publishers -- especially independent publishers -- more than it hurt Google. I'm curious to know why Australian Treasurer Josh Frydenberg believes Australia could succeed where other countries have failed.
Google makes a small percentage of its revenue from media. Meanwhile, news sites rely on platforms for traffic. Unable to compete, smaller independent publishers will be decimated. The biggest beneficiary of this change will be News Corp. Murdoch's sticky fingers are all over this, and News Corp’s global CEO Robert Thomson has said that News Corp has been pushing for platforms paying for the news they use for more than a decade.
“There is a lot more concern about the power of News Corp, and how it is used, than about the power of Google,” Terry Flew, professor of communications at Queensland University of Technology, told Financial Times.
According to ACCC, “a healthy news media sector is essential to a well-functioning democracy.”
We currently have neither -- and forcing Google to donate money to News Corp won’t change that.
Want to hear more from Pando? Sign up to our weekly newsletter.