Google leaving Australia serves nobody, but it is not an empty threat

Feb 1, 2021

Google is threatening to withdraw its search functions; Facebook is threatening to remove news posts. Not idle threats but with its flawed media legislation, the federal government is using the wrong solution for a problem that requires regulation.

​It’s hard to pinpoint the exact moment when the decline of old media started. Was it the founding of an online search company, Backrub, by a couple of software engineers in 1998? Or when NewsCorp sold Myspace for US$35 million in 2011, writing off an investment of US$580 million. Or was the seminal moment the public listing of Facebook in 2012 for a seemingly ridiculous valuation of US$90 billion?

Backrub was renamed Google, Myspace remains irrelevant and Facebook has a market capitalisation of US$720 billion. No wonder the former giants of media in Australia are feeling aggrieved. Since 2012, the two dominant media companies, the former Fairfax empire (now under the umbrella of Nine Entertainment) and the newspaper arm of News Corp, have lost billions in market value.

And what do most corporates do when the value of their business is in steep decline and profits are down? When the “hidden hand of the market” is actually working? Run to the Government for help, of course. Nine and News complained to the ACCC that these big, bad global companies had stolen their advertising revenue. “All we want to do is provide quality journalism and we can no longer afford to,” they cried.

Fake news abounds in the misguided war on the digital media platforms

That Facebook and Google have too much power is clear. However, the proposed legislation being debated in Parliament does nothing to protect consumers from the search and social media giants. Nor does it serve the lofty purpose of supporting quality journalism.

All it is designed to do is re-direct a small fraction of the money earned by the Internet giants to old media.

The legislation doesn’t tackle the critical issue of of how the social media platforms, in particular Facebook, continue to distribute fake news and hate speech, how it continues to be a platform for misinformation and wild conspiracy theories and how it generally turbo-charges the polarisation of public debate. All in the misappropriated name of free speech.

Nor does the legislation tackle Google’s search dominance.

These companies pose a challenge globally, so there are limits to what Australia can do. Google’s threat to leave the local market is real, and would hurt consumers and small independent media immeasurably more than it would hurt News and Nine. Facebook threatening not to accept links to news content will primarily hurt online independent media such as this site, as well as consumers.

Elsewhere, the US has launched anti-trust actions against Google and Facebook, claiming both companies have used their market power to curb competition. These cases will take many years to resolve. By way of comparison, the Federal Trade Commission’s cases against Microsoft’s dominance over the PC industry took nine years from the first investigation in 1992, to when it was ultimately settled in 2001.

The European Union has been more effective in their actions against market dominance, at least in a fiscal sense. Google has been fined almost U$10 billion in various cases over the past five years. Yet little has changed as Google remains totally dominant in search.

Facebook has also faced scrutiny and has been fined over its privacy breaches – most notably after the Cambridge Analytica scandal in 2016. Cambridge Analytica obtained without consent the personal data of millions of Facebook users, primarily for political advertising purposes. But Facebook’s behaviour hasn’t changed much either.

And as ignorant parliamentarians, Rod Sims of the Australian Competition and Consumer Commission and mainstream media executives huff and puff, the stark reality is that Australia cannot curb their market power merely by punitive financial means. They are just too big, too wealthy and don’t give a damn.

But there are other options.

Licensing

The Internet is, in effect, a broadcasting platform. To broadcast TV and radio in Australia (and most other countries) you need a licence. Licences cost money and come with conditions around what the owners can and cannot do, regulated by the Australian Communications and Media Authority (ACMA). The rules cover content, advertising and state that news and stories must be presented in a balanced way. ACMA is a forum for complaints, regulate gambling and gaming sites and the rules also impose restrictions on foreign ownership.

As a sovereign nation we have a right and an obligation to regulate media. It can’t be a “one size fits all” approach, but in light of the overwhelming power of online media giants, it seems an obvious starting point that companies that operate search engines and publish online in Australia should have a licence and abide by the rules under penalty of forfeiting that licence.

Publishing

The licensing of search engines would be breaking new ground, but the licensing of social media platforms is relatively straightforward. Facebook, Instagram, Twitter and the rest are publishers, however much they deny the fact. Publishing used to be the domain of established writers and journalists working for organisations. But now everybody can be, or pretend to be, either of those things by sharing their words, videos, podcasts or pictures online.

The social media platforms cannot claim content neutrality and should therefore be subject to most of the same laws and regulations as other publishers, including defamation and minimum standards of truth and proof.

Know thy source

Social media postings have taken over from letters to the editor as the primary means for the general public to make their voices heard. Reputable newspapers do not publish letters without knowing who they are written by – and this publication is no different. There are always reasons for stories to be attributed to an anonymous writer, but the publisher must still know who the writer is.

Social media should be compelled to do the same, demanding ID checks the way a bank or government agency does in return for services or participation. If MrPotatoHead or MsQanonRules doesn’t have an ID, tough luck. This, of course, can only work if current privacy practices are turned on their head, giving users confidence and protection.

Privacy

One of the most egregious aspects of social media is that the platforms have been allowed to get away with flouting privacy principles. We, the consumers, gave them that right by saying yes to using their platform for free in return for allowing them access to personal data, including our usage history. And now we pay the price as our collective data has become someone else’s asset.

Social media must be compelled to guard our data in the same way banks guard our money, and our ID must be stored entirely separate from our meta- and usage-data. Any identifiable data cannot be shared and our data sold without express consent. Currently, consent is basically assumed unless one has opted out, if that option is even available.

These measures are not trivial, will take time to implement and will also meet with plenty of resistance from Google, Facebook et al. And it will cost them to implement. Whether it will cost them more or less than a portion of their advertising revenues is anybody’s guess. But this is a better use of their money than simply giving it to the old and failing media behemoths. Propping up old media is not only short-sighted, but does nothing to tackle the real issues or protect consumers.

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