from the stop-it dept
Lots of attention has been paid to the mess down in Australia with its
news link tax “bargaining code”, and Facebook’s response to it, including the eventual caving. So now both Google and Facebook have effectively agree to pay a tax to Australia’s largest media companies… for daring to send them free traffic. It’s the most bizarre thing in the world. Imagine if every time TV stations ran an advertisement, they also had to pay the advertiser. That’s what this is.
However, we should focus in a bit on Microsoft’s role in all of this. First, before Google agreed to its deal and was threatening to shut down news links in Australia, Microsoft stepped in and said it would gladly support the law. This was so transparently greedy of the company. Basically, Microsoft has realized that it’s failure to actually be able to compete in the marketplace means that it wants to support this kind of law knowing that one of two things will happen: (1) Google will bail out of a market, leaving it open to Microsoft or (2) it’ll just cost its competitor Google a lot of money.
The fact that it also fucks with the basic concept of the open web and not having to pay to link doesn’t seem to enter into Microsoft’s calculus at all. This takes Microsoft back to the shameful era in which it paid some godawful amount of money to political trickster Mark Penn not to help Microsoft better compete, but to simply attack Google like a political candidate. This is classic political entrepreneurship rather than market entrepreneurship. It’s a sign of failure, when you’re not trying to actually innovate, but simply abusing the political process to hamstring competitors.
But, in this case, it’s even worse, because it’s not just Google and Facebook that get screwed, but the entire concept of the open web.
And it gets worse. Microsoft seems so positively giddy about how this all worked out in Australia, that it’s now taken the campaign global. Microsoft’s President, Brad Smith wrote a blog post calling for this policy to be adopted elsewhere. Incredibly, Smith seems to argue that the attack on the Capitol might not have happened if Google and Facebook were taxed this way globally. The whole thing is just… so obnoxiously dishonest. It bemoans the loss of “professional journalism” and blames it all on social media.
But that’s garbage. Multiple studies have shown that Fox News was a bigger problem in spreading disinformation than social media. And, remember, that Fox News boss Rupert Murdoch is the main beneficiary of the Australian law. It’s literally taking money from the less problematic spreader of disinfo and giving it to the more problematic one. But Smith/Microsoft act as if this is all for the good of society:
The ideas are straightforward. Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content.
Even more important, the legislation will redress the economic imbalance between technology and journalism by mandating negotiations between these tech gatekeepers and independent news organizations. The goal is to provide the news organizations with compensation for the benefit derived by tech gatekeepers from the inclusion of news content on their platforms.
This has been Murdoch’s framing all along and it’s total bullshit. There is no “imbalance” here because there’s nothing to negotiate over. You don’t need to negotiate to link. It’s a free thing, and as we saw when Facebook pulled its links, and all these news organizations started whining, it showed that those news organizations actually recognize they derive value from the free links. The whole thing is ridiculous.
And Smith tries to frame it as if it’s protecting democracy and the American way. That’s garbage.
These are now pressing questions for the Biden administration. Facebook and Google persuaded the Trump administration to object to Australia?s proposal. However, as the United States takes stock of the events on January 6, it?s time to widen the aperture.
The ultimate question is what values we want the tech sector and independent journalism to serve. Yes, Australia?s proposal will reduce the bargaining imbalance that currently favors tech gatekeepers and will help increase opportunities for independent journalism. But this a defining issue of our time that goes to the heart of our democratic freedoms. As we wrote in 2019, ?The tech sector was born and has grown because it has benefited from these freedoms. We owe it to the future to help ensure that these values survive and even flourish long after we and our products have passed from the scene.?
The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead.
I’m an independent journalist. This isn’t going to help me. There’s no way in hell any of these solutions will ever involve us getting any money out of this, and if it did, then suddenly there would be all sorts of questions about whether or not we could even cover those companies fairly, since they’d be a key source of revenue. How the hell does this help democracy?
And, then it gets even worse. Soon after, Microsoft announced that it was teaming up with EU publishers to seek a similar link tax in the EU.
Microsoft is teaming up with European publishers to push for a system to make big tech platforms pay for news, raising the stakes in the brewing battle led by Australia to get Google and Facebook to pay for journalism.
The Seattle tech giant and four big European Union news industry groups unveiled their plan Monday to work together on a solution to ?mandate payments? for use of news content from online ?gatekeepers with dominant market power.?
They said they will ?take inspiration? from proposed legislation in Australia to force tech platforms to share revenue with news companies and which includes an arbitration system to resolve disputes over a fair price for news.
Some people are seeing through all of this — and even Inc. Magazine called out Microsoft as “the ultimate troll” for its stance here. But this isn’t a game. This isn’t just politics. This is about the nature of the open web.
And Microsoft is singing happily along as it helps regulators and old, failed publishers around the globe break the open web. All because they’re jealous of Google.
It’s not difficult to see the path this is likely to head down, and it’s bad. A few countries force Google/Facebook to pay these old school publishers. Then, basically everyone else on the web notices this and says “hey, how come they get to link to me for free? Shouldn’t they be paying me too?!?” And then, one by one, we’ll just hear of every failed and flopped industry demanding free money from the companies that actually innovated. The music industry must be so excited. Book publishing? Absolutely. What about boxed software providers (hi, Microsoft!).
Basically, every industry that failed to adapt and innovate online is likely to go running to government demanding payment. And the very nature of the open internet ceases to exist the way it has for the past three decades. It’s a terrible, terrible idea, and it was ridiculous that it went ahead in Australia. But Microsoft is an actual tech company, which should know better, but it’s trollish obsession with Google beating Microsoft in the market means it’s willing to toss out the open internet if it thinks it will harm Google.
It’s shameful and disgusting.
Filed Under: antitrust, australia, brad smith, competition, links, negotiations, news tax, paying for links
Companies: facebook, google, microsoft