At the end of February this year, Australia passed a law which required Facebook and Google to either negotiate deals for news material and links carried by their services, or be forced into arbitration. If no agreement could be made, the law mandated that the links be taken down from the platforms entirely. Over the past two months, this small regional issue has become a critical test case for ways in which national regulators might start to reshape their media economies, rather than simply surrender to the forces of the global online advertising market as dictated by large online platforms.
As the implications of Australia’s News Media Bargaining Code start to sink in around the world, the subject of how technology companies like Google and Facebook support journalism is an issue of growing interest to both newsrooms and policy makers. In the US, the policy conversation has focused on the possibilities of antitrust in tackling the size and impact of advertising platforms. Similarly, there seems to be an increased need for a “digital new deal” to help rebuild independent local journalism. A number of bills and initiatives are currently on the books to help the plight of local journalism. Meanwhile, Google and Facebook both announced a tripling of their annual budgets directed towards journalism, from $100 to $300 million each per year over the next three years.
Many have argued for some time that technology platforms need to be the source of funding for repairing information market failures precipitated by their highly lucrative business models. However, new initiatives stemming from the regulatory approach in Australia leave an open question on how platforms should play a role in the future of sustainable journalism: is the deliberate tying together of the fortunes of newsrooms and publishers with those of Google and Facebook actually counterproductive? It is possible that–almost by accident–we are creating an environment in which regulators are placated by a flashy increase in funding by Facebook and Google instead of addressing the need for actual regulatory reform to support journalism?
In a recent seminar hosted by Columbia Professor Anya Schiffrin and McGill University’s Taylor Owen, a remarkably wide range of competition ministers and regulatory experts from around the world discussed the implications of the News Media Bargaining Code. The chair of the Australian Competition and Consumer Commission who first introduced the Code, Rod Sims, talked about the model being a “negotiate/arbitrate model.” What this means is that arbitration becomes a threat to platforms if negotiation isn’t available or fair. According to Sims, the threat of arbitration evens up the bargaining power between platforms and publishers. He made it clear that the objective of the code “is to allow a proper commercial deal for content being produced.” But when pondering the very premise of this new Australian formula, he said: “Is this code the best code for supporting journalism? In my opinion that’s the wrong question,” explaining that the bargaining code is just an economic element amidst a suite of measures required to bolster journalism. One of the more pertinent drawbacks of the code, though, is that instead of separating the functions of journalism from those of technology platforms, it forces them together in an opaque way.
No details of the negotiations nor the sums of money exchanging hands between the platforms and publishers are made public by the code, though Sims added that because publishers were involved, sums are likely to leak out. This in itself demonstrates part of the problem: not one, but two sets of players (the technology companies and their journalism beneficiaries) are drawn closer together through complicity into an obscure bargain.
Last week, the Center for Journalism and Liberty, a program of the Open Markets Institute, produced a conference on “The Future of Journalism And Democracy,” pulling together lawmakers, journalists, academics and policymakers. The day focused particularly on Google and Facebook’s roles in our democratic and news media institutions. Discussions were wide ranging, from looking at the numerous antitrust lawsuits against Google and Facebook, to discussing the prospects for philanthropy in saving local journalism, to a panel parsing the funding mechanisms through which large platforms currently support the news industry (or capture them, depending on your perspective). If you have time, the whole day is worth watching here, though the issue of exactly how we should be negotiating the issue of the dependency of journalism on technology was subsidiary to the immediacy of the overall crisis.
A panel discussion at the conference about the nature of the relationship between Google and Facebook’s journalism funding efforts and in turn, the realities of the newsrooms they fund, demonstrated the conflicts and tensions within the issue. In the discussion, Dan Froomkin discussed his recent article in Washington Monthly, which describes how the dynamics between Facebook and the New York Times is far more embedded and lucrative than readers might realize. The Times’ media columnist Ben Smith responded to Froomkin by suggesting that the dark influence was not necessarily coming just from the platforms, but they were themselves responding to pressure and adverse coverage. Smith claimed the readiness of Facebook to do deals with publishers such as the Times was effectively driven by aggressive lobbying and coverage from Rupert Murdoch’s News Corporation. Smith went on to say this could be seen as a form of extortion, just as the Facebook and Google payments might be thought of as lobbying money.
As global regulators examine the benefits of adopting the Australian approach, whereby platforms are regulated into forging deals with publishers, both Google and Facebook are already ahead of them, signing up publishers in order to pre-empt other possible legislation. But what are the terms of those bargains? How much of the money is actually directed into journalism efforts as opposed to management budgeting or shareholder growth? Do the deals come with any contingency requirements, such as diversity or transparency? Most likely, we’ll never know for sure. The rush by platforms to swiftly dole out hush money while also outrunning policymakers is a lost opportunity to create better bargains for newsrooms and the communities they serve.
Earlier this week, the New York Times ran a piece sweeping up the regulatory moves, from China to America, which are seeking to impose regional restraints on the power of technology companies, describing it as the “global tipping point” for big tech. In the United States, disappearance of advertising support and the consequent collapse of local journalism is one of the most effective tools being used to leverage more regulatory oversight against the platforms. But the scramble to cross-subsidize leaves unanswered the uncomfortable question of whether this close relationship of corporate power and supposedly accountability journalism is something that needs dissolving rather than encouraging.