Australia Gives Up Any Pretense: Pushes Straight Up Tax On Facebook & Google To Pay News Orgs

from the how-dare-you-send-us-traffic-without-paying dept

Last week we wrote about France’s push to force Google to pay legacy news organizations for the high crime of… sending them traffic. That was somewhat expected, as under the EU Copyright Directive, some version of this will show up in every EU country over the next few months (though France’s first approach is particularly dumb). Down in Australia, they’re not subject to the EU Copyright Directive, but it’s not stopping them from taking the same ridiculous approach:

Facebook and Google will be forced to share advertising revenue with Australian media companies after the treasurer, Josh Frydenberg, instructed the competition watchdog to develop a mandatory code of conduct for the digital giants amid a steep decline in advertising brought on by the coronavirus pandemic.

As the article notes, the Australian Competition and Consumer Commission had been working to get the media companies and Google and Facebook to come up with a voluntary plan, but since the media companies basically want it all, that hasn’t worked out so well. Instead, the ACCC has now been told to just write up the plan. Make no mistake about this: this is the Australian government, at the behest of a bunch of legacy media companies that failed to adapt to the internet, now taxing Google and Facebook for sending media companies free internet traffic that those companies don’t know how to monetize.

And it goes beyond just having to pay to send them traffic, it also requires Google and Facebook to let media companies know ahead of time if they’re going to make any changes to their algorithms that might impact content rankings. That is ridiculous. It’s basically giving news companies preferred placement in search rankings, and locking those legacy providers in. Why in the world should media companies get special access to the algorithm of either company?

Frydenberg said it was only fair that media companies that created the content got paid for it.

They do get paid for it. They decided to put content on the web. If they don’t like the traffic, they can easily use robots.txt to block sites from scraping them. If they can’t monetize the traffic, that’s on them, isn’t it?

?This will help to create a level playing field,? he said.

This is the exact opposite of a level playing field. This is basically tilting the playing field strongly towards legacy media companies in a manner that is not only silly for the internet companies, but in a manner that makes it nearly impossible for new entrants in the field, as the legacy players get an automatic boost from the free money they get from the internet companies that send them free traffic.

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Comments on “Australia Gives Up Any Pretense: Pushes Straight Up Tax On Facebook & Google To Pay News Orgs”

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59 Comments
Anonymous Coward says:

Re: Re:

Nah, Google will simply pull out of Australia and delist everything there. The government will fold as pressure from the suddenly desperate rent seekers realize they are screwed without Google and that will be it before long. It’s the only play Google can logically take since it will be a deluge of countries rushing to tax them similarly the moment they cave in to anyone. Spain already bit the dust and France is looking at the same. Media companies need to get their shit toguether or fold l8ke it should happen with companies that fail to adapt. Protectionist laws are a cancer to society.

Jacqueline says:

Re: Re:

The Murdoch Empire basically keeps a Right leaning Government in power here in Australia; The LNP-Liberal National Party; Murdoch newspapers make up approximately 80% of the press.
Also Apple.com News App uses Murdoch newspapers and Magazines; so Murdoch has probably requested The Australian Government fix The Google side of things.
Murdoch also hates/ loathes our National Broadcaster The ABC. Over the past few years The cutbacks made by this Government is criminal; Approximately a year ago a new CEO was installed by The Government at the ABC a staunch Murdoch fan; who first began work with Murdoch?

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Anonymous Anonymous Coward (profile) says:

It's our game, we make the rules, till Google quits that is.

"“This will help to create a level playing field,” he said."

If they want a level playing field, wouldn’t all the players need to be playing the same game? Google doesn’t write news articles, the media organizations do. The media organizations don’t run search engines, Google does. Those seem like different games to me. It’s more like cricket and croquet.

I am not sure why Facebook is even in the conversation except they have a lot of money and apparently some of their users post things about subjects that also wind up on media organizations sites. Does Facebook actually post snippets from media organizations? Or is it that users post snippets? If the latter is the case, how is that Facebook’s fiscal responsibility?

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Stephen T. Stone (profile) says:

Said it before, saying it again: Google should immediately delist all Australian news organizations from Google News results (and possibly Google results in general) without warning or “due” compensation. The nuclear option remains the only way to make sure these fools learn what their greed will cost them.

Anonymous Anonymous Coward (profile) says:

Re: Re:

I have some agreement with the nuclear option, then I think about what will happen when the rest of the world gets on the same train. Does Google news only list blogs? Do other search engines follow suit in a self-protective move? Do they de-list the media organizations entirely out of spite? Is Google News a significant enough part of Google Search to have a serious impact on the rest of their search business?

In the end it will be the users who get hurt. Yes the media organizations will also get hurt, and after a whole lot of screaming and crying foul, followed by some serious pouting, might, and I mean might, beg the search industry to re-include them. Whether they do or not will depend upon their fiscal ability to remain solvent in the mean time.

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Stephen T. Stone (profile) says:

Re: Re:

I can see where you’re coming from, but I worry about what will happen to other search engines — ones much smaller than Google — if they end up subjected to the same “tax” as Google for “daring” to display in search results anything other than a headline for a news article. Then I wonder what will happen to social media services that dare to do the same thing when a user links to a news article (e.g., when Twitter displays a link to a news story that contains at least part of the lede paragraph). And then I wonder what will happen to popular blogs that quote part of a news story when linking to said story.

A business model that can be destroyed by Google News alone deserves to be destroyed. It doesn’t deserve to be propped up by a government more interested in taking on Big Bad Tech than in ensuring the survival of journalism.

Anonymous Coward says:

Re: Re: Re: Re:

Just like properly regulated taxicabs with insured, well-trained, accountable drivers deserve to be destroyed because Uber and Lyft cut corners?

When plagiarism and piracy are part of the destruction, that needs to be undone.

The news organizations could easily build THEIR OWN search engine, much like expedia.

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Stephen T. Stone (profile) says:

Re: Re: Re:2

They could build their own search engine, sure. But who would use that service as much as Google?

Also:

When plagiarism and piracy are part of the destruction, that needs to be undone.

Google is sending traffic to those news sites. “Undoing” what Google is doing out of some misguided misunderstanding of what Google is doing — which is exactly what will happen, if Spain is any indication — will cause a dramatic drop in traffic and advertising revenue for those sites.

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Anonymous Coward says:

Re: Re: Re:2 Re:

News companies could easily build their own search engine? LOL

So why don’t they do it as so many others have done and failed. They would have the same issue anyway. They would have to pay out to everyone they had a link on their own search engine. Because of all the rules and regulations as there is, it’s almost impossible to start up a new search engine anyway.

Do you really think Taxicab drivers are well trained? Have you ever been in a Taxi Cab? No one else knows how to drive as good as them? LOL. If they were doing the job people wanted and liked, UBER and LYFT would never stand a chance. Besides when it comes down to it, Competition is a good thing.

Putting up snippets is NOT plagiarism. It’s been reported that those little snips drive 90% of the traffic to these news sites. It’s free advertising if anything. Clearly you don’t know what plagiarism even means.

Scary Devil Monastery (profile) says:

Re: Re: Re:2 Re:

"Just like properly regulated taxicabs with insured, well-trained, accountable drivers deserve to be destroyed because Uber and Lyft cut corners?"

Bad analogy but don’t let that stop you from coming out swinging in defense of the obvious Red Flag Act.

If Uber and Lyft cut corners and go outside general employee protection law then that’s a problem with Uber and Lyft.

However, that’s not what’s happening here. A better analogy would be that of the Taxicabs trying to squeeze money out of the phone companies for including their business name in the phone directory.

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Bergman (profile) says:

Re: Re: Re:

Given the media companies’ track record, I’d expect at least one attempt at making it mandatory for Google to list their snippets so Google can have snippets to pay for.

I’m not sure how a government might go about making a foreign company conduct business they don’t want to conduct, though. It’s not a very large step from there to outright slavery.

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Rocky says:

Re: Re: Re:2 Re:

It requires Google to "not make any changes to how information is displayed pending required negotiations between Google and the publishers".

Well, Google can just put up a static page for France then…

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sumgai (profile) says:

Re: Re:

While I’ve always liked the nuclear option, I think in the long run that’s not gonna keep other nations from pulling the same stunt, vis-a-vis the EU requiring each country to implement the Mathias Döpfner Guaranteed Personal Enrichment Directive. (aka Article 15 of the Copyright Directive.)

What would work better would be to continue the current balance by telling the "Will Whine For Money" news outlets they will be charged exactly the same amount as their snippet tax for the privilege of having their headlines appear on a Google results page. Yes, this flies in the face of Google, et al, claiming that their search results cannot be bought, but hey, the news organizations have only Mathias Döpfner to thank for this bogus attempt at redistributing unearned wealth.

Some EU nations, and France in particular, believe that the Internet respects borders. The planet will be rocked right out of its orbit when those ossified bureaucrats are replaced by the next generation, the ones that grew up with the internet as just another aspect of daily life. They are the ones who "get it", in that advertisers put their money where they eyeballs are, not where the aforementioned Whiners want them to put it.

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Anonymous Coward says:

“This will help to create a level playing field,” he said.

No, it will force Google to pull out of Australia and bankrupt Australian news orgs for lack of traffic.

There must be something in the air down under. Their politicians seem outright stupid.

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Anonymous Coward says:

The view of Mike, a resident of the State of California in the U.S.A., is that this is bad for the legacy news media, the country of Australia, and the people of Australia.

I seriously doubt that the people of Australia view the fact that Australian news is controlled by a foreign company (to Australia) located in California, with values that are some of the most perverse in the world in the same way.

Most likely Australians view the situation in the same form as the rest of the world outside the U.S.A.

GO HOME YANKEE.

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Anonymous Anonymous Coward (profile) says:

Re: Re:

Mike is home, and there is no reason he, nor anyone else should not have or express their opinion.

You wear your own flag bravely, but you haven’t thought this through. You do know what will happen if Google takes their ball and goes home, don’t you? The media organizations will be in the same sad position they find themselves now, only worse. They could of course start their own search engines, spend a few years figuring out how to run them, and then a few more years getting all the users in Australia to stop using Google (or other search engine) and move to their search engine, and then they can pay themselves for using their own snippets.

Oh, wait…that won’t work because then they would be transferring money to their competitors (unless they use a double standard and exempt themselves) and might very well ban all the smaller media companies from their search results. How will that sit?

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TFG says:

Re: Re:

So the view of the people of Australia that Google should be forced to pay Australian news organizations for the privilege of sending them free traffic.

"Go home" is probably what will happen – Google did it in Spain.

I look forward to seeing what substitute for traffic the Australians come up with in the absence.

TRX says:

Seems like a self-solving problem to me. The Goog and Fecesbook stop directing clicks to Australian media, which then die from lack of traffic. At least, few print media elsewhere can make it on print alone; their web sites are what keep them more or less solvent.

Then the Goog and FB buy the remains for pennies on the dollar and go back to business as usual.

TRX says:

Re: Re: Re:

Fewer pennies than it would take to lobby a defense against the Australian government. And ownership of the papers would make them "legitimate news", which would close the loop of their attempts to manipulate news stories.

When a newspaper goes down, its assets are usually nearly zero, as they probably outsourced printing and mortgaged or sold their building already. And the potential purchases of their morgue and brand is very small, and mostly in not much better financial straits than they are.

Heck, the biggest expense of buying a defunct newspaper would probably be permits, licenses, and legal fees…

Anonymous Coward says:

let’s put the blame where it should be! anything to do with copyright pushes, claiming how the various parts of the entertainment industry is losing out through one form or another of piracy and whatever else can be dreamed up as the cause is all down to the USA and the way those politicians bend over and grab ankles for all sections from Hollywood to document writers and the courts back them at any cost to those accused, guilty or not! pockets must be red hot with the activity of hands going in and out! these industries have forgotten what it’s like to go and do something to earn money, all they want to do is get it for free in the form of ridiculous fines etc and they call the public pirates! hypocritical assholes! so much for the promotion of the arts etc! let’s throw that out and just make sure ‘the family can get everything for doing nothing for the next 2 generations!

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aerinai (profile) says:

So... why not leave?

So if this is just a part of the Google News platform, sounds like to me that Google just needs to get out of that business. It can’t be a huge money maker unless it is a loss leader to more data for better ad targeting. So, just quit doing it in countries that don’t like nice things.

If this is literally ANY search, then that seems absolutely ridiculous. That could get really bad really quick. Wait til quotes from movies or books start showing up in Google searches and those ‘creators’ (well, the publisher that owns the rights) starts knocking on the door. IMDB needs to start paying every actor for use of their ‘likeness’ and Wikipedia might as well shut down because where did they get all of THEIR information? ‘Stolen’ from OTHER sites!

This is getting beyond ridiculous…

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Bergman (profile) says:

Re: So... why not leave?

Which is exactly what Google does. And has done in every country that enacted this sort of law.

The immediate results are that those media companies experience an enormous drop in advertising revenue, to the extent that in many cases they could see bankruptcy looming over them.

Google doesn’t need to lobby for a repeal or amendment of this particular stupidity, the media companies do it for them.

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TKnarr (profile) says:

One wonders. The news organizations didn’t create the material behind their stories. If they carry a story about how person A acted and what they said, it was person A who performed the actions and declaimed the statements. Without that, the news organization would have had nothing to write a story about. So if Google owes the news organization for linking to their story (profiting off what the news organization created, supposedly), then isn’t person A owed compensation for the use of their performance by the news organization in the article? The news organization is, after all, profiting off what person A created.

Let’s take it a bit further. When a news site carries it’s own ads, it profits when I view a page and profits further when I click on an ad. But the news site didn’t perform the actions that yielded the profit, I did. Since the news site is profiting off of someone else’s performance of actions, don’t they owe that someone else compensation for the use of their performance?

If the news organizations really want to make this the rule, are they willing to accept all the consequences of having that rule enforced?

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Anonymous Coward says:

How Australian media works

I’m sorry, but while most of the comments (and the OP) work in general, they don’t understand how the Australian media landscape works. Pretty much all of Australian news falls in one of the following 3 categories:

1) Owned by Murdoch or Nine news (Chaired by a former treasurer with very sympathetic views to the current right wing Government)

2) Government funded (and both being run down by funding cuts and too cowed and coward to hold the Government to account)

3) Too small to matter.

Google disappearing from Australia will hurt the small players, make no difference to the ABC, and help the big players.

The story here isn’t really a rehash of the France / Spain links tax stories Mike has written over the years. The story here should be a rehash of the "copyright filter will help youtube by eliminating competition" stories, the "problems with market dominance and limited number of players" stories or the "cosy relationship between Government and major players in an industry" stories.

With the worst prime minister in Australian history, it is very understandable why Scotty from Marketing would want to use this crisis as an opportunity to remove the amount of critical journalism that can be easily found.

Google leaving Australia isn’t a threat. It is a Conservative wet dream.

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Stephen T. Stone (profile) says:

Re:

Google disappearing from Australia will hurt the small players, make no difference to the ABC, and help the big players.

Then maybe the small players should be working together to keep Google from leaving by, oh I’unno, protesting the tax proposal and calling out anyone who supports it.

Just an idea, though.

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Anonymous Coward says:

Re: Re: Re:

Then maybe the small players should be working together to keep Google from leaving by, oh I’unno, protesting the tax proposal and calling out anyone who supports it

Joking, right, or just naive? The whole point of media consolidation is that the small players have no voice and no power. Next you’ll suggest that if the small players banded together, they could stop Nine and Murdoch killing off AAP. Or that Australia has a Government who would listen or care.

We live in a Murdochracy.

Federico (profile) says:

Not the same if copyright is left alone

Down in Australia, they’re not subject to the EU Copyright Directive, but it’s not stopping them from taking the same ridiculous approach

It’s not the same at all, so far. I don’t know what "a mandatory code of conduct" means in Australian jurisdiction, but if no ancillary copyright alias neighbouring rights are created, and the copyright law doesn’t change, it’s infinitely better than the 2019 copyright directive.

One can disagree with the objective (redistribution of wealth from one business to another), but taxation and antitrust are correct tools for that objective, while copyright is clearly the wrong one. Copyright affects billions of people and millions of websites or works, while taxation and antitrust can, in principle, be targeted.

Then of course it doesn’t help if the "code of conduct" ends up being something like "use EU’s best practices for article 17" or "follow the standards of compensation for news aggregators established in France". That would just be a copyright law change by the backdoor.

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That One Guy (profile) says:

'Deal.'

‘We will absolutely pay for all the snippets and links that we lists on our services related to news sites. That number however will be nothing because we won’t be listing them anymore, however we will be happy to list sites that agree to an opt-in contract allowing us to provide snippets/links regarding their contact free of charge.’

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Anonymous Coward says:

Opt-In

Let’s employ an opt-in requirement. News agencies have refused to deploy robots.txt file in a responsible fashion. News sites hope to "trap" Google into continuing to crawl them under the pretense that the news sites can’t stop Google from "stealing their content." Google can set all news-sites/domains to be "do not crawl without presence of a robots.txt." Include an additional page level requirement for a "google-may-spider-and-report-with-zero-fee" meta tag. Negotiation done.

Simplifies Google’s programming job. Requires any news agency that wants to opt-in to do site-level and page-level work to specify that Google MAY use their content without fees. Once implemented, Google has no more need to interact with these idiots, whether news agencies or countries. Also, small companies can opt-in just as easily as the big ones.

Final recommendation is that Google relocate all physical resources to nations unlikely to try to pull this silliness. Replace all personnel from the idiot nations with employees in the site-hosting locales. Remove all opportunities for taxation or seizures by stupid states.

tz1 (profile) says:

Google and Facebook Cash In while burning News orgs bandwidth?

The problem is sending traffic in most other contexts is called a denial of service attack.

Imagine if a billion people clicked on TechDirt in the next hour! Wouldn’t that be great!

So Facebook profits by running ads. Google profits by running ads. Clicking through sends traffic to the news site which might or might not have ads, and might or might not have to pay Google or Facebook through their ad syndacator.

Google and Facebook are parasites monetizing content that is generally freely available and the Authors, be it individuals or news organizations get NOTHING.

You are the product and paying in privacy and tracking when you use Google or Facebook. The small sites don’t have enough traffic to create a comprehensive behavioral dossier on you.

And no one is yet asking how the Ad revenues are doing now that everything is closed due to Covid. Google and Facebook are only profitable by selling targeted ads.

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tz1 (profile) says:

Google and Facebook Cash In while burning News orgs bandwidth?

The problem is sending traffic in most other contexts is called a denial of service attack.

Imagine if a billion people clicked on TechDirt in the next hour! Wouldn’t that be great!

So Facebook profits by running ads. Google profits by running ads. Clicking through sends traffic to the news site which might or might not have ads, and might or might not have to pay Google or Facebook through their ad syndacator.

Google and Facebook are parasites monetizing content that is generally freely available and the Authors, be it individuals or news organizations get NOTHING.

You are the product and paying in privacy and tracking when you use Google or Facebook. The small sites don’t have enough traffic to create a comprehensive behavioral dossier on you.

And no one is yet asking how the Ad revenues are doing now that everything is closed due to Covid. Google and Facebook are only profitable by selling targeted ads.

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Anonymous Coward says:

Re: Google and Facebook Cash In while burning News orgs bandwidt

Selling targetted ads is only profitable if you have the audience to put them in front of. Both companies only have that audience because people like what the give them, be that a way to keep in touch with friends, and follow the antics of the famous, or the ability to find all sorts of content on the web, including content hosted for free on Google servers.

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That One Guy (profile) says:

Re: Funny way to spell 'sending them free traffic'

News sites can stop the traffic that Google sends them almost entirely via robot.txt, yet instead they are trying to shake them down for money, and often are trying to get more traffic. That alone should have told you that the news agencies know full well that google is not a ‘parasite’.

Thanks for the bingo though.

Scary Devil Monastery (profile) says:

Re: Google and Facebook Cash In while burning News orgs bandwidt

"You are the product and paying in privacy and tracking when you use Google or Facebook."

Disingenious and false or just honestly ass-backwards by ignorance?

"Google profits by running ads."

An outright whopper right there. The web page profits from running ads. Google profits from selling statistics and enabling advertisers to set up ads targeted at consumers who didn’t block tracking cookies.

As a user nothing stops me from running ghostery and noscript, or even just setting my browser policy to make sure no tracking cookies or ads are received. Google, it has to be noted, withdraws none of the functionality of the services they offer for free should I choose to do so.

Meanwhile the service they do offer for free – web indexing – is tantamount to a free phone registry and/or road map.
The media you keep trying to defend here are essentially demanding money from the phone company for the privilege of being included in the phone registry.

"…individuals or news organizations get NOTHING."

Because no one is entitled to get paid by the phone company because the phone company includes their name and phone number in the list of findable phone numbers. No author, ever, managed to get paid for people mentioning his name and what books he wrote – yet you imply Google needs to pay the author for exactly that.

Here’s what I guess will happen. Google closes its offices in Australia and de-lists every .au news site completely. From which point on australians will still be able to use Google….but only by using the .com address and the australian news agencies won’t show up in normal search.

That’s what Google will have to do since simply listing a news agency in the registry brings no revenue.

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