Who should pay for the news? The question is at the centre of an increasingly fraught battle between the world’s large technology companies and traditional news publishers, which are demanding compensation for the use of their content.
Since the internet took off, platforms such as Google and Facebook have become dominant forces in the media landscape as more and more people have turned to them for news. A recent survey found that about half of adult Americans rely on social media “often” or “sometimes” for news. Big Tech’s increasing power has seen platforms rake in the lion’s share of local and classified advertising, helping to undermine the business models of traditional publishers. Newspapers and magazines hosted half of all advertising spending worldwide in 2000. Inside two decades their share of that roughly $530bn market has fallen to less than 10 per cent.
The debate has been brought to a head over the past year as the pandemic has further heightened the power of the Silicon Valley giants. Regulators and some publishers are now demanding a levelling of the playing field. Australia’s government thinks it has the answer. In what could turn into a global test case, a draft code of conduct would force the two largest platforms, Google and Facebook, to pay for circulating news content. It would establish a binding arbitration system for payments and require platforms to notify publishers in advance about algorithm changes, which affect search engine rankings or data collection.
Google has hit back, threatening to shut its search engine in Australia if the government approves the legislation. The company has said it is willing to negotiate with publishers over paying licence fees for content but has argued that the new law would oblige it to pay not only when providing previews of media content but also when sharing links to the content.
It is time to tone down the rhetoric. Australia’s proposal may have helped to galvanise the debate but it is not the answer. The country’s consumer protection regulator has said the code is to address the “uneven bargaining position” between domestic news media businesses and the digital platforms. But the proposal is too blatant and arbitrary a manner of tipping the scales in favour of big media empires. The truth is many publishers have failed to find a workable digital business model. Excessive concentration of market power is best addressed by antitrust policy. There is an argument to make copyright laws tighter. Efforts in this direction in Europe, however, have met with mixed success. Google last week struck a deal with some French publishers agreeing how it will pay for the reuse of content after initially saying it would show only headlines. It has pledged to spend $1bn over three years on these licensing deals.
The reality is that powerful tech companies will continue to try to dictate terms. Notwithstanding individual agreements being brokered between the platforms and publishers, a sustainable solution will require a systematic approach. One way forward could be a version of the performing rights system in music. Newspapers would receive a small royalty payment every time an article was read on an internet platform. A portion of the money raised could subsidise public interest journalism, perhaps through an intermediary body akin to the Arts Council in the UK. As the US election recently highlighted, a viable fourth estate plays an important democratic role — one that is at risk of being forgotten in the current war of words between Big Tech and traditional media.
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