Google, Facebook must pay for the news they use
It is indeed a paradoxical situation. The coronavirus pandemic’s deadly sweep across the globe has given news and information a consumption boost it has never seen before. Yet news media networks are facing the biggest crisis of their lives, and many of them have folded up without a whimper. Advertising revenue has vanished as both supply and demand for goods and services has evaporated. Distribution of physical newspapers has stopped or is down to a trickle. It is well known that news gathering is an expensive process requiring huge investments in reporters, technical staff and equipment. However, trillion-dollar digital platforms like Google, Facebook and Microsoft, which are not in the news business, use the news content of others to expand their reach.
The recent decision of the Australian government to make it mandatory for Google and Facebook to pay traditional media for the news content they use is welcome. The move follows an 18-month inquiry by the Australian Competition and Consumer Commission, which has also suggested norms of sharing ad revenue, and a regulatory system including penalties. After the commission submits its final report, the payment formula will become law in July this year. France and Spain had earlier enforced the EU copyright law requiring payment for reproduced news, but Google and others have preferred to shut down their news flows.
With Australia’s unequivocal support for the pay-for-what-you-use principle, it may now be difficult for Facebook, Google and Microsoft to hold out much longer. So far they had refused a voluntary formula for sharing of advertising revenue with traditional news media in Australia and elsewhere. What they seem to be doing are serious offences: First, there is skimming of news content without permission, clearly a synonym for theft; second, Facebook and others are generating ad revenue on poached news content, which would have otherwise flowed to TV stations and print networks. For news media, the one positive spin-off of the pandemic has been the sudden spike in demand for news and information. The opportunity to bring back the struggling news networks into the black should not be lost.