Why Google and Facebook are being asked to pay for the news they use – explainer

The digital platforms aren’t happy and have warned of dire consequences if the draft legislation is passed into law

Curated via Twitter from Guardian Tech’s twitter account….

The Australian government has released draft legislation which would compel Google and Facebook to pay Australian media companies for their news.

The Australian government has released draft legislation which would compel Google and Facebook to pay Australian media companies for their news.

Google and Facebook are gateways to the internet for almost every Australian, so news companies have no choice but to distribute their journalism via these platforms.

Google and Facebook will be forced to comply if they continue to operate in Australia and feature news content on their platforms. Google made $4. 3bn in advertising revenue in Australia last year and Facebook made $0. 7bn, according to documents filed with ASIC.

News companies are different because they compete directly with the platforms in the digital advertising market in a way other online businesses don’t – and without Google and Facebook’s market power.

The code includes minimum standards for the platforms, including advance notice of algorithm changes and changes to the way news content is displayed, but this is only for substantial changes and is intended to give news companies time to adjust.

Nothing in the draft code allows news companies to artificially inflate their rankings to others’ disadvantage and nothing would prevent the platforms from making the advance notice of changes generally available.

The platforms do appear determined not to have to pay for news content on their main services, including Google Search and Facebook news feed.

The government, acting on the advice of its competition regulator, accepts the argument that the platforms benefit far more, and that their substantial market power means the news companies do not have the capacity to demand a better deal.

The digital platforms have responded aggressively, warning users of dire consequences and, in the case of Facebook, threatening to remove news from Australian Facebook pages.

The Australian government has released draft legislation to compel Google and Facebook to negotiate with Australian media companies.

Before the draft legislation was released, Google had agreed to pay several Australian publishers to license content for a new “publisher curated news” product for Google News and Google Discover.

Each side – the platform and the media company – submits a final offer, and the arbitrator chooses the most reasonable, taking into account how much the platforms benefit from the news provided, how much it costs the media company to produce that news, and whether the amount being sought would put an “undue burden” on the platform.

Are the platforms opposed in principle to paying media companies for news? No.

News companies and the digital platforms need each other.

The code is not intended to compensate news companies for the loss of advertising income due to digital disruption.

Why should news content be treated differently from other commercial content that appears on Google and Facebook, such as retail, travel or financial services?

Google says the code would require them to give media companies data and prior notice of changes to algorithms and that this would put other users of Google Search and YouTube at a disadvantage. Is this true?

Why does the Australian government think Google and Facebook should make payments to Australian media companies?

News Corp has been aggressive in lobbying for the platforms to pay for news, and it would benefit under the code if it becomes law, but the code does not give preferential treatment to News Corp.

The platforms claim this exchange is more or less even – that the benefits they receive, and those that the news companies receive, are equivalent.

It does require the platforms to be more transparent about the benefit they receive from news content but does not dictate what they need to pay.

Will payment to news companies make them dependent on the platforms? It shouldn’t.

More than half the Australian population finds news via the platforms, the 2019 University of Canberra digital news report found.

Link to original article….

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