Large distribution networks like Google and Facebook gain traction from news stories painstakingly put together by ‘traditional’ media houses. As the latter face increasing financial pressure, the former are on a growth trajectory. Is this a level playing field?
In this article appearing on Newsbook I explore some basic concepts around the mounting pressure on Google and Facebook to compensate media houses for the data they re-serve.
If Google results contained no validated content by journalists would it be useful? The trite answer would probably be “not quite”. And yet, Facebook and Google use content developed by media platforms and republish it. In the process, they also monetise it in ways that traditional media houses cannot. Google, for example, features news in 8-14% of its search results. And the money rolls in for larger distribution channels but not necessarily for the media companies who invest money and risk to compile that content. In Australia, at least 51 news media outlets and newsrooms have closed since the beginning of the coronavirus crisis. An estimated 33,000 news workers in the US have been furloughed.
News publishing was a financially weak business before COVID-19, the situation is much worse now. And this just when people want and need curated content more than ever.
A FinancialTimes report said that Australia will force Facebook and Google to pay for content created by traditional media companies in a move aimed at easing digital disruption in the sector. FT attributes this move to the deepening crisis perpetrated by the coronavirus pandemic which is driving companies to the ground, media companies included.
The Legal Battle
This is not untrodden ground. France, Spain and Germany have so far tried to force Google and Facebook into a corner but the actions have, mostly, failed.. The actions brought forward in Europe so far have been through a challenge on copyright laws. Australia, it seems will be changing tactic and attacking through competition laws.
In Spain Google thwarted legal action by shutting down news content to avoid paying fees imposed by the Court. In France, the competition watchdog ordered Google to negotiate in good faith with local media firms to pay for reusing their content. However, instead of paying French publishers for reusing their content, Google limited content covered by the law in local search and in Google News. France’s competition watchdog seems to indicate that the unilateral move constitutes an abuse of a dominant market position.
The Fourth Estate
And it’s not just assuaging the morbid curiosity or worry caused by the pandemic that is at risk here. Not for nothing, the media is called The Fourth Estate, that fourth pillar of democracy which gives a voice to the public. The media is there to protect consumers through thorough information, improve transparency and address political imbalance. Read more about the role of the media in a crisis here.
This is not an argument to protect inefficient work practices or failing media businesses. In protecting the media we are not seeking to protect traditional media companies from the rigour of competition or technological disruption. Rather we must 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.