Actually, the charge against the tech giants is that they pocket a lion’s share of online advertising revenue by hosting contents developed by news organizations, but the latter hardly get their due. According to Australian Treasurer Josh Frydenberg, Google accounts for 53% of Australian online advertising revenue and Facebook 23%.
There have been some major developments in Down Under over the past one week that could have far-reaching consequences world over. Australians on February 18 woke up to a rude shock when they found that they could no longer read or share news links, nor access news organizations’ pages, on Facebook. And not just in Australia, Facebook users around the world too found that they could no longer read or share Australian news links after the social media giant barred international users from accessing Australia-based news outlets via its platform, even as the Australians were barred from accessing both national and international news outlets. Facebook accounts of news groups like Australian Broadcasting Corporation, The Sydney Morning Herald, The Australian, etc., were all wiped clean.
Though shocking, Facebook’s move wasn’t surprising either, nor unexpected. For, this was an outcome of a tiff that was raging for quite some time between the social media giant and Australian Government over the latter’s move to pass a legislation that would compel tech giants like Facebook and Google, among others, to pay for hosting news content on their platforms. Christened News Media Bargaining Code (NMBC), the law that the Australian Parliament was debating then and has since been passed will force the tech giants to strike a deal with Australian news outlets, among other things.
Facebook’s Australia and New Zealand managing director Will Easton explained: “The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content. It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia.”
Though search engine giant Google too resented NMBC and initially even threatened to wind up its Australian operations, it later made a U-turn after Microsoft stepped in to offer its search engine Bing. It thereafter struck deals with Australian news organizations like News Corp and Seven West Media to pay for some of their news content, though Facebook did not indicate any change in its stance, before completely blacking out news Down Under. But the Australian Government did not relent either as Prime Minister Scott Morrison declared: “We don’t respond to threats.”
And just when it seemed that a major showdown between the two sides was imminent, Facebook announced on February 23 that it would pay Australian media companies for content and restored news after some intense negotiations with the Government, which reportedly agreed to tweak the law that would not compel the tech giants to pay as of now. Three days later, Facebook said it reached a deal with three Australian media groups.
As the bitter spat over revenue sharing between the Government and tech giants unfolded in Australia, the world watched closely as this could have far-reaching consequences everywhere. Already, lawsuits have been filed in American courts against the tech giants over sharing of online advertisement revenue even as Facebook announced last year of paying The Wall Street Journal, The Washington Post and USA Today. France has already become the first country in the world to enforce rules governing sharing of contents after a court in 2020 upheld that such agreements were required by a 2019 European Union copyright directive, forcing Google to negotiate with French publishers. Now Facebook and others will face similar requirements in other parts of the 27-nation trade bloc.
Actually, the charge against the tech giants is that they pocket a lion’s share of online advertising revenue by hosting contents developed by news organizations, but the latter hardly get their due. According to Australian Treasurer Josh Frydenberg, Google accounts for 53% of Australian online advertising revenue and Facebook 23%. Legacy media claim that the situation has become particularly critical for them as they move over to digital world because the traditional medium is becoming less lucrative, but here they are finding their space severely constricted as the tech giants have ‘monopoly’.
While it’s true that social media giants are dependent on news outlets for content because one of the surest ways to tackle fake news is to host links of authentic news sources, it’s also a fact that content developers are equally dependent on social media platforms for amplifying content and maximizing reach as they help route a large number of visitors to their websites.
Actually, the entire issue is beyond digital advertising revenue sharing and also about transnational tech giants’ compliance with laws of sovereign nations, if not undermining their sovereignty. As Australian Health Minister Greg Hunt declared in Parliament following Facebook’s news blackout, “This is an assault on a sovereign nation. It’s an assault on people’s freedom and in particular it’s an utter abuse of big technologies’ market power and control over technology.”
Having taken the baby steps in 1997 when social media as we understand today first emerged with the launch of Six Degrees, which enabled users to upload a profile and make friends with other users, it has since come a long way and is now no longer confined to just making friends, but a major tool for communication, amplifying content and even propaganda. But the exponential growth of the medium in recent years due to technological advancements has also increased the clout of the tech giants owning them, inviting charges of monopoly and defiance of statutes. So, it’s no surprise that they are increasingly running into confrontations with governments. And the latest move by Facebook in Australia only showed the sheer power they wield. No wonder, countries are also increasingly standing up to them. For instance, Facebook was forced to comply with a Turkish law to name a country representative, even as an Italian regulatory authority fined the tech giant this month for failing to comply with its earlier order related to how it informs its users about the commercial uses of their data. The European Union has already passed a General Data Protection Regulation restricting use of personal data collected by the tech giants.
In India too, Twitter is increasingly coming under pressure from the Government to take down certain accounts for their ‘inflammatory content’, while WhatsApp already complied with a directive a few years back of limiting the ‘forward’ option. The Government of India recently announced new digital regulations to obligate social media companies to remove ‘unlawful’ content within 36 hours of an order of a court or the government.
While there’s no denying that social media has helped promote freedom of speech world over, it has also come under increasing scrutiny for gross misuse, besides the tech giants’ propensity to defy laws of sovereign nations. Hence, it’s a tightrope walk for democracies – upholding freedom of speech while ensuring that tech giants comply with national regulations without also inviting accusations of stifling free speech.