Should Google and Facebook pay for content?

A report published in the Financial Times said that Australia is planning to make Google and Facebook pay for content. These platforms not only thrive on content but also penalise repetitive content, essentially live largely parasitic virtual lives in that they lift content from platforms and ‘use’ it.

Dr Gege Gatt, Chairman of Beacon Media Group and Chief Executive Officer of the IT specialist company EBO explained the situation to Imagine, he said, if you typed a search request into Google – say for information about the coronavirus or bushfires or the best phone to buy – and the results that came back to you included none from traditional media companies. No news reports are written by journalists, no independent reviews by technology reporters, no professional compilations of the latest on a crisis. How useful would Google be to you then?

Riding piggyback on content

The trite answer would probably be “Very little”. And yet, Facebook and Google use the content of the media platforms and republish it. In the process, they also monetise it. This means that they know what people are looking for and sell advertising space in the sites people look for. Dr Gatt said that Google, for example, features news in 8-14% of its search results. And the money rolls in. For Google and Facebook but not for the media companies who make all the outlay and risk necessary to be able to compile that content.

The FT 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.

A Legal challenge

This is not untrodden ground. Dr Gatt said that France, Spain and Germany have so far tried this line of attack but have failed. He said that the attack has so far been through a challenge on copyright laws. Australia, it seems will be changing tactic and attacking through competition laws. Dr Gat said that in Spain Google thwarted government by shutting down news content to avoid paying fees. 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 stopped displaying content covered by the law in local search and in Google News. France’s competition watchdog said it believed the unilateral move constitutes an abuse of a dominant market position.

HIgh stakes

The stakes are high. In 2019, Google’s largest revenue stream was from advertising, a whopping US$161 billion. For Facebook it was US$70 million, translated as 98% of its revenue stream. This sits badly when one is in the midst of an accelerated economic collapse caused by the Covid-19 pandemic where traditional operators are falling like dead flies. In Australia alone, at least 51 news media outlets and newsrooms have closed since the beginning of the coronavirus crisis. An estimated 33,000 news industry workers in the US have been furloughed. – “News publishing was a financially weak business before COVID-19, and COVID-19 is crushing it,” said Dr Gatt, “but it’s doing it just in this moment when people want and need content more than ever.”

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. Like air, however, democracy is best appreciated by its absence. Why asked, should people care if Google and Facebook make money at the expense of media houses? “Definitely,” said Dr Gatt most emphatically. The media, he explained, is there to protect consumers, improve transparency and address the political imbalance. He warned that this is not an argument being made to protect inefficient work practices or failing businesses. “In protecting the media we are not seeking to protect traditional media companies from the rigour of competition or technological disruption. Rather, it is meant to 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” concluded Dr Gatt.