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GOVT BACKED EXTORTION OF BIG TECH BACKFIRES SPECTACULARLY


Be careful what you wish for: government-mandated theft backfires as tech giant pulls pin.

The government thought it was on a winner with an extortion racket aimed at big tech. That's now backfired disastrously.


The government’s news media bargaining code was always based on a lie — one devised and disseminated by News Corp — that big tech platforms steal content and must be made to pay for it.


It was also based on ignoring an important distinction between the two intended targets of the theft — Google and Facebook.


Google serves users results, including news items, based on its own crawling of the internet. Media companies could prevent Google from searching their sites with a trivially small adjustment to the code of their websites.


The fact that they fail to take this simple step illustrates the truth of the relationship between media companies and the search giant — the former obtain enormous benefit from it.


Facebook is entirely different. Media companies actively take the decision to create their own Facebook pages and post news articles on them. Users choose to share links to articles on their own pages. Yet this was supposedly content theft too.


If it was ever content theft, the big media companies should be pleased that, as of this morning, they can no longer post Australian news of any kind on their Facebook pages. Nor can users share links to their content. Loudly proclaim that you’re the victim of theft and you want it to stop — and be careful what you wish for.


Google Australia boss Mel Silva’s threat in January to remove its search function from Australian users was met with widespread derision from Australia politicians and its mainstream media. Google was evidently bluffing and would fold before the might of Australian lawmaking.


And anyway, who needed Google when you could use the product of another tech monopolist, Microsoft? When Google began agreeing deals with media companies — albeit for a small fraction of the billions touted by big media companies, and for less than what they were publicly claiming — the mainstream media and the government thought they had achieved victory.


That’s all a smoking ruin this morning, as media companies examine bare Facebook pages and blocks on posting content. And by no means just media companies. Bloggers, NGOs, local government pages, literary journals, the Bureau of Meteorology, sports organisations like Cricket Australia, and the South Australian Health Department have all been caught up.


Why such a broad net? That might have a lot to do with just how broadly the government drafted its bargaining code legislation, defining news as “issues or events that are relevant in engaging Australians in public debate and in informing democratic decision-making; or current issues or events of public significance for Australians at a local, regional or national level”.


And it doesn’t have to be produced by a journalist. It was defined that way to prevent the tech companies from arguing they weren’t carrying news content. So, here we are.


All the result of a staggering miscalculation by a government that thought it could run an extortion racket at the behest of the Murdochs on the widely reviled big tech companies. A government that insisted it had had “constructive” talks with Facebook executive chair Mark Zuckerberg — indeed, was still insisting so this morning after the shutdown.


Except Facebook now holds the whip hand in any such discussions. Politicians and the media assumed it could never withdraw its platform, but the company went right ahead and did it.

To reverse its decision, Facebook will demand substantial changes to the appalling media bargaining code — especially the absurd bargaining provisions which are heavily tilted in favour of local media outlets with a “take it or leave it” arbitration mechanism.

The real victims, however, will not be the Coalition, or the big media companies. Those with an established brand, well-known mastheads and incumbency in the media market will, if anything, benefit from the impact as smaller competitors, small and medium publishers, regional media, and niche publications that rely heavily on social media to share content and attract eyeballs lose one of their key platforms. Advertisers who use them to reach particular target audiences will also suffer.


The shutdown is potentially disastrous for those companies and for media diversity in Australia. Audiences will suffer.


The point of the extortion racket was always to drive windfall revenue to News Corp and Nine — thereby indirectly strengthening their position in a shrinking market. That will continue to be the case while smaller publishers are preventing from using Facebook — if anything, more so.

It’s not the way it was intended to be by the government that has stuffed this up so badly, but Mission Accomplished anyway. The rest of us just have to count the cost of yet another rotten media policy driven by the demands of moguls.



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