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By: Mason Hudon

The Australian Dilemma

In February of 2021, Facebook, Google, and the Australian government made headlines as they engaged in a fiery debate over proposed legislation that would force the media giants to pay for the ability to link news articles promulgated by Australian news companies through their digital platforms. An initial, and more aggressive version of this law, entitled Australia’s News Media and Digital Platforms Mandatory Bargaining Code Act of 2021 (NMDPMBC), was met with such reproach that Facebook actually halted news service to its Australian users in mid-February of this year, going “dark” for three to four days in an unprecedented protest to the alleged “assault” on its lucrative business model. Following talks between Australian Treasurer Josh Frydenberg and Facebook Chief Executive Mark Zuckerberg, and in the wake of a wave of negative press associated with the move to cut services, Facebook begrudgingly lifted restrictions near the end of February. A final law was subsequently passed by Australian parliament on February 25, with notable revisions borne of the contentious talks preceding its passage. Importantly, a proposed forced arbitration process, that would likely strongly increase the bargaining power of Australian media companies when legally enforced negotiations came to an impasse, was amended to include an opt out provision “if [a media company] could convince the government that it had already ‘made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements with news media businesses.’”

More importantly, the NMDPMBC has globally stoked the fires of debate over the current state of news media, as well as the very nature of the internet. A world first in its scope and breadth, the NMDPMBC could potentially be, “a move that[…] unleash[es] more global regulatory action to limit [media giants’] power.” Reactions to this contingency are mixed.

Some, like Timothy Berners-Lee, “the British computer scientist known as the inventor of the World Wide Web, say[…] Australian plans to make digital giants pay for journalism could set a precedent that renders the Internet as we know it unworkable.” By undermining the “free linking” system, whereby the internet is seen as an inherently free space for the sharing of information and wherein links may be hosted by any and all sources free of charge, critics of the Australian law see this situation as opening the floodgates to stifling the free exchange of information that has become a paramount aspect of the internet today. Furthermore, by requiring payment for the hosting of links to news websites or other sites as well, such regulations may narrow the field of companies that can fight their way into the market by raising already high startup costs.

In contrast, some see laws like the NMDPMBC as long-overdue arbiters of change that will return power to news media companies in the face of Facebook and Google’s recent, relative hegemony in the arena of the free press. Eli Sanders, opining in a University of Washington Law Election Law class on the effects of the internet on traditional news media practices, said “[l]ocal newspapers have seen over 70% of their ad revenue disappear as Facebook and Google have gobbled up the profits. 60% of newsroom employees have been shed by companies [and] the [media] platforms have decimated the underpinnings of journalism.” These numbers are backed up by in-depth data from the Pew Research Center, and it is widely reported that currently, “the Duopoly [Facebook and Google] captures 90 percent of all digital ad revenue growth and approximately 60 percent of total U.S. digital advertising revenue.”

It is argued that this situation has caused a disintegration of the traditional process, driven by decreasing ad revenues, undermining thorough journalism while making it difficult for news media organizations to facilitate the “special push and pull between editors and writers” that has, for years, led to unbiased, fact-checked, and well-sourced journalism a la Walter Cronkite. The inability of news publishers to effectively profit off of their work is understood to contribute not only to job loss and poorer quality journalism, but also to the prevalence of fake news and misinformation due to the decreased integrity of traditional vetting processes. For years, lobbying groups within the United States, like the News Media Alliance, have argued these points to little avail.

With these facts in mind, the Australian NMDPMBC should serve multiple broad goals by giving Australian news media companies the ability to control their resources more properly and maintain larger staffs due to increased revenue from their reporting. It might also lessen the effects of disinformation and misinformation in the nation by providing a strong basis for ensuring that well-researched news is being promulgated into the marketplace of ideas, and might in the long run lead to more widespread quality journalism if companies are able to rebound from the deleterious financial effects that media giants have had on their bottom lines.

Is America Next?

Currently there is legislation in the works signaling that the United States might be poised to follow in Australia’s footsteps.

On March 10, 2021, House Antitrust Chairman David Cicilline (D-RI), ranking member Ken Buck (R-CO), Senate Antitrust chairwoman Amy Klobuchar (D-MN), and Senator John Kennedy (R-LA) introduced two identical versions of what is being called the Journalism Competition and Preservation Act (JCPA). “The bill would provide a limited antitrust safe harbor for news publishers to collectively negotiate with Facebook and Google for fair compensation for the use of their content,” provisions that appear to closely mirror those found in Australia’s NMDPMBC. The bill also appears to have clear targets: “[t]he draft defines online content distributors as companies with at least 1 billion monthly active users that display, distribute or direct users to news articles,” and this provision strongly suggests that the bill is meant to counter big tech’s power in the marketplace for news, rather than acting as a broad blanket provision that seeks to flush news providers with cash across the board.

Given the composition of the legislative branch and bipartisan criticism of the power wielded by media giants paired with their inability and unwillingness to better regulate their platforms, JCPA may find significant traction with lawmakers moving forward. Even Senate Minority Leader Mitch McConnell (R-KY) has expressed support for the bill.

Perhaps just as telling, two days after the introduction of the JCPA, “[o]n Friday, March 12, the News Media Alliance President & CEO, David Chavern, testified at a House Antitrust, Commercial, and Administrative Law Subcommittee hearing, ‘Reviving Competition, Part 2: Saving the Free and Diverse Press,’ on the need for the dominant tech platforms, such as Facebook and Google, to compensate news publishers fairly for use of their content” in the United States.

In the end, Facebook and Google are entering an era of increased opposition to their dominion of the world wide web. Potential Section 230 reform, widespread pushback of the rollout of digital currencies, privacy concerns, and now the rising influence of the JCPA look to reign in the unabashed money-making machinations of big tech in the United States. While such criticisms are well-founded, questions remain as to what will become of the internet’s “free market” and provision of services to the consumer. Who or what will ultimately prevail? Only time will tell.