In a few days, Australia will become the first country to introduce laws that will force Google and Facebook to pay news publishers for displaying their content.
The tech giants, which have in recent years cornered the lion’s share of online advertising revenue, reacted angrily to news of the proposed legislation. Google even threatened to shut down its search engine in Australia. But the country is pressing ahead undaunted.
In today’s newsletter, we delve deep into the ongoing controversy, which has been in the making ever since media companies started to lose control of how their publications reached the public, and with it, a share of the ad income they generated.
World War News
Australia will introduce
landmark legislation next week to force Google and Facebook to pay news publishers and broadcasters for content. On Friday, an Australian senate committee recommended no changes to the draft laws, which were introduced in Parliament in December.
Microsoft, rather than siding with its Big Tech cohorts, has turned on them in what could be termed — without exaggeration — a battle for the future of news.
The Australia model: The Australian law would allow for both
individual and collective bargaining by Australian media companies to determine payment for displaying news on Google and Facebook.
- If they cannot agree on the size of the payments, the issue would go to “final offer” arbitration in which each side proposes a compensation amount and the arbiter chooses one or the other.
- The law also requires the tech companies to inform media outlets of changes to their ranking algorithms 14 days in advance.
- Platforms that don’t comply face fines of up to A$10 million (Rs 56.3 crore).
- There are no plans to make smaller search engines such as Bing pay for linking users to Australian news, but the government has not ruled that option out.
- Australia’s biggest media companies, Rupert Murdoch’s News Corp and Nine Entertainment, have said they think the payments should amount to hundreds of millions of dollars a year.
Last week, Google threatened to pull its search engine from Australian if its parliament approved the proposal, which it termed “unworkable”. Facebook said it would stop Australian users from sharing news on its platforms.
But their threats didn’t go down well. Sensing an opportunity, Microsoft quickly endorsed Australia’s proposal. Then on Thursday, Microsoft president Brad Smith expanded on the endorsement in a
Shots fired: Smith pointed to a
study that claimed that news content earned Google a hefty $4.7 billion in 2018. “[P]eople often do not click through to the original story. This means that news organisations go uncompensated… Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content.”
Claws out: Within hours, Google hit back with a
blog post by Kent Walker, senior VP for global affairs and chief legal officer. He wrote: “Microsoft’s take on Australia’s proposed law is unsurprising — of course they’d be eager to impose an unworkable levy on a rival and increase their market share.” He also linked to an
article claiming to debunk the study that Smith had pointed to.
The battle is global: Smith acknowledged in his piece that the situation has caused an “unusual split” within the tech sector, adding, “We’ve heard from people asking whether Microsoft would support a similar proposal in the United States, Canada, the European Union, and other countries”.
“The short answer is yes.”
EU gets going: Last week the
Financial Times reported that EU lawmakers are looking at ways to adapt parts of Australia’s draft laws. The report said the EU could also require the companies to inform publishers about changes to how they rank news stories on their sites; ie, to their algorithms.
Big Tech’s ad grab: Google and Facebook ferry more than 80% of external traffic to various sites, according to Parse.ly, web analytics for online publishers. Before the duopoly took shape, media companies controlled how their publications reached the public and collected all the ad income they generated.
Where does Uncle Sam stand? Under Donald Trump’s presidency, the US backed Google and Facebook in its battle with Australia. Days before Trump left office, the US government urged Australia to ditch the draft laws. The Biden administration is yet to comment on the issue.
Google’s in everything: Google’s threat to shut down its search engine in Australia — or anywhere else, for that matter — would ripple across industries, as many companies earn money from its search revenue.
- Apple receives billions of dollars globally to set Google as the default search program on iPhones, Safari and Siri.
- Browser makers including Mozilla and Opera get revenue share from Google, as do numerous internet carriers.
– Zaheer Merchant
Twitter’s problem gives Koo an opportunity
Twitter’s war of words
with the Indian government escalated over blocking orders related to farmers’ protests, following which several ministers and departments of the Union government
started flocking to made-in-India clone Koo.
Over the past week, the year-old app claims to have
clocked a ten-fold increase in downloads leading to a cumulative three million lifetime downloads within the country alone. Koo has
also added prominent Indian entrepreneurs to its captable even as it
fights allegations that its app leaks private data of its users.
Startup deals in the works
- Swiggy is building a war chest against arch-rival Zomato, which is charting out its route to an IPO. The Bengaluru-based food delivery firm is in advanced negotiations to close a $700-800 million funding round led by sovereign wealth funds Qatar Investment Authority with participation from GIC of Singapore as well as global alternative asset manager Falcon Edge.
- Facebook-backed social commerce platform Meesho is in talks to raise nearly $250 million from investors led by Japan’s SoftBank Vision Fund, multiple people in the know of developments told ET, potentially valuing the company post-money at about $2 billion.
Here are the most important stories of the week, curated by the ETtech editorial team
Contrary to expectations of many market observers, WhatsApp has processed just 1.6 million of the over 6.7 billion transactions on India’s Unified Payments Interface (UPI) since its launch in November.
Several popular foreign content creators have taken to social media to create long-form infotainment content around the farmers’ protest in India ever since singer-actor Rihanna tweeted about it.
Disney+ Hotstar earned about $0.91 from each subscriber during the quarter, a major dip from $2.19 in the September-ended quarter.
Executives at L&T Infotech, L&T Technology Services, TCS, Infosys, Wipro, HCL Technologies and Persistent Systems cashed some portion of their ESOPs over the past two months.
The focus will particularly be on defining cryptocurrencies as ‘private’ and ‘public’ as the government is looking to allow public ones, such as those floated by countries, and ban private ones.