Australia leads the charge against the internet front pages

Australia seems set to make Google and Facebook pay for scraping traditional media, an idea which would hugely undermine their basic business models if it became widespread – and could fundamentally change the way the internet works.

shutterstock 197656919 credit archiwiz 06.10.20 australia leads the charge against the internet fro
Archiwiz /

Famously, the social aggregator site Reddit likes to boast that it is the ‘front page of the internet’. But in fact, as this is written Reddit lies way down at number 18 in the Alexa internet rankings. In the number one spot, of course, is Google: the true front page of the internet. In at number two is YouTube, owned by Google. Facebook is at number six and the rest of the top ten, as one might expect, is filled by Chinese sites.

As far as the Western world is concerned, then, the gateways to the internet are Google and Facebook. The two huge web services both make billions in advertising revenue because billions of people use these platforms to find content which is of interest to them.

That’s where things get a bit interesting. Facebook does own a lot of content itself, the floods of chitchat, marketing, video snippets, ramblings and photos of their lunch that its users supply for free. But Facebook, probably correctly, feels that it needs better than this to keep people coming back. Thus a lot of the prominent content on the huge platform is news and features from more or less conventional publishing organisations who pay significant sums to create such output.

Google has even less of its own to offer, with no mountains of user-supplied fluff (though it does have unseen mountains of detailed files on every user). Instead the original web giant simply assumes that if anyone anywhere puts any information on a server without a special label telling Google to back off, it’s OK for Google to take and keep a copy of that information. Later, in response to a search query from a user, Google then considers that it will be OK to take a headline and snippets of that content and serve it up in a list of other search results next to its own adverts. As far as Google is concerned, the process is entirely automated, the content is free and costs are almost nothing. Even if it makes very little money on each search, much of that money will be pure profit.

Google naturally doesn’t like to pay for humans to decide what’s important and ensure that the content it presents high up its lists is timely, truthful and properly written. It does place a value on human work that it hasn’t paid for, however: it does this most obviously by placing content from news organisations high up in its results, even in ordinary searches not made using Google News.

It’s SO unfair, says Google

In many cases, of course, the people whose content is scraped and monetised by Google are very pleased for this to happen, as they may get useful business or attention of other kinds as a result. A news publisher isn’t likely to be happy, however, as Google and Facebook with their billions of users and vanishingly tiny costs have driven the price of digital adverts to extremely low levels. Even when a publisher gets a click through from Google or Facebook and manages to serve up an advert to a reader or viewer as a result, the resulting revenue is seldom or never enough to cover the publisher’s costs. As a result, private-sector news media has long been in decline throughout the Western world.

The Australian government says this has to change. Canberra is planning to put rules on the books by the end of the year which would compel Google and Facebook (and the two giants’ other tentacles, YouTube and Instagram) to pay publishers whenever private-sector news content appears on their platforms.

This hasn’t gone well with the giants: there are already prominent yellow warnings splashing in front of Australian users of Google and YouTube, warning that “Aussies” are “at risk”.

Facebook is worried too.

“Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram,” said Will Easton, Facebook chief for Australia and New Zealand, talking to the Financial Times recently. “This is not our first choice - it is our last.”

Google appears to be threatening a complete withdrawal from Australia. Lucinda Longcroft, the web giant’s top lobbyist in Canberra, told the FT that the new draft rules are “so deeply unfair and so unworkable that all options are on the table.”

Australia may not be the biggest country in the world, but a withdrawal would mean noticeable pain for the giants. Google and Facebook together achieved more than AU$5bn of revenues in the land Down Under in 2019. And nobody really thinks that the costs of complying with the new Aussie rules - known as the News Media Bargaining Code - would really be noticeable in the giants’ global accounts.

This fight’s been fought already in other places

But, of course, this isn’t just about Australia: it’s about the whole Western world. Publishers and governments friendly to them have been trying to make the web giants pay for content for more than a decade. Google actually shut down Google News in Spain some years ago to avoid paying Spanish publishers, and has so far stood off the French authorities by serving up news headlines only, without accompanying snippets from the copy. In other countries the web giants have sought to divide their enemies by striking individual deals with chosen publishers: this has happened in Germany, the US and Brazil.

Australia is different in that the incoming Aussie rules look to be much harder to wriggle out of or evade. Merely closing down Google News in Australia or serving only headlines would not work. All Aussie-produced news would need to be removed from all searches and channels if Google wanted to avoid payments: and it’s worth noting that publishers registering themselves as news outlets with Google News is probably one of the few effective ways the web giant has of identifying news content as such without expensive human effort on its own part. Facebook would have a similarly massive job on its hands.

And once the task was done, both the web platforms would be a lot less attractive: not only for Australians day to day but for the rest of the Western world too, whenever news broke first in the Pacific time zones - as it quite often does. Simply ignoring the rules wouldn’t work either, as fines for non-compliance are serious: up to 10 per cent of Australian turnover.

All in all, you can see why the giants are thinking that total withdrawal from Australia, leaving no turnover for Canberra to seize, might be simpler. Other governments might see this as a failure for the new rules and decline to act themselves, goes the thinking.

But it does seem likely that very soon there would be new, Canberra-compliant search engines and social networks looking to grab that AU$5bn market and serve Australia’s 25 million relatively wealthy citizens. They might even pay Australian corporate taxes, as well as helping support an independent press. It would be hard to see that as a failure. It is hard to imagine that Australia’s lead will not be followed by other nations in time: even on their home ground in the US, the web giants are facing more and more criticism.

One way or another, it looks as if change is coming for the true front pages of the internet. That’s probably bad news for Google and Facebook themselves: but, famously, they employ very few people. Not that many of us will weep for them. Quite apart from their battles with the news publishers, the giants are also known for some quite hardball dealings with other industries they work in contact with, such as the cloud sector, the telcos, and providers at all points on the hardware and software spectrum, from data centre to device.

There’s at least a chance that the Australian push against Facebook and Google will be followed up in other nations. And there’s at least a chance that may actually mean more opportunities for everyone else in the tech sector.