India's Govt Wants Big Tech To Pay for News – Australia's Journey Holds Lessons

Australia's plan to encourage bargaining instead of taxing Big Tech seems to have worked.

Tech News
3 min read
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The Indian government intends to make Big Tech companies, including Facebook parent Meta, Google, Apple, and Microsoft pay publications – digital portals and newspapers – for featuring news content on their platforms.

“The news publishers have no negotiating leverage at all, and this needs to be tackled legislatively," the minister of state for information technology and electronics Rajeev Chandrasekhar told The Times of India.

This decision to seriously examine this issue “in the context of new legislations and rules” appears to be fairly recent. In the winter session of 2021, the Ministry of Electronics and Information Technology (MeitY) told the Parliament there was no proposal to bring in such legislation yet.

Australia was the first country to pass a law to force Big Tech to pay for the news they use on their platforms; there is a lot that can be learnt from its journey.


Australia's Uphill Battle

In 2017, Australia's government told the Australian Competition and Consumer Commission (ACCC) to look into the impact of "online search engines, social media and digital content aggregators on competition in the media and advertising services markets.”

ACCC investigated the matter and published a report two years later in 2019. It found that, as news shifted online, there was a reduction in certain types of reporting essential to the healthy functioning of a democracy like local government and court reporting.

The report also highlighted the dominant position of Google and Facebook when it came to driving the advertising traffic that publications depended upon.

Based largely on this report, the government told ACCC to develop a code “to address bargaining power imbalances" and "support the sustainability" of the Australian news media sector.

Google and Facebook fiercely opposed this code. Facebook temporarily blocked the publication of any news story on its platform while Google threatened to withdraw its search engine from the country.

Despite stiff resistance, the news media bargaining code was passed in 2021. It allows the government to designate certain digital platforms as subject to the obligations under the code.

Since big platforms don't want to be designated, they try and improve their standing by striking deals with news publishers. Both Google and Facebook have now negotiated deals with Australian media houses.


Australia's plan to encourage bargaining instead of taxing Big Tech or imposing a copyright infringement fee seems to have worked, at least partly.

Several new journalist roles have been created in under-served parts of the market as a result of the deals, Bill Grueskin, a professor at Columbia Journalism School wrote in a report.

Sydney-based media professor Monica Attard was also quoted by Grueskin as saying that the market for entry-level journalist roles is the best she had seen in 20 years.

More details on its effectiveness will emerge after a review of the bargaining code, commissioned this year, is released.


Key Takeaways

The fact that Google and Facebook agreed to Australia's code instead of following through on their threats shows they aren't willing to lose significant markets over this issue.

It also supports the argument that, even though Google and Facebook don't gain much advertising revenue from featuring news headlines, news does provide them indirect benefits. According to the ACCC, over one-third of Facebook users reported using the social media site to access news.

Still, if India were to try and pass an Australia-style law, it should expect fierce resistance from Big Tech, as professional journalism appears to be a diminishing priority.

There are other issues to watch out for as well. Since Australia's bargaining code was designed to encourage commercial deals between news organisations and online platforms, there's a severe lack of transparency.

"Australia looks like a success story to those who’ve long yearned to force big tech to prop up suffering newsrooms. But it’s a murky deal, with details guarded like they’re the launch codes for nuclear missiles."
Bill Grueskin

This, according to Grueskin, has led to some publishers having a difficult time negotiating with the tech companies because they don't know how much they should be earning.

"The riches aren’t spread equally. SBS, one of Australia’s two major public broadcasters, got money from Google but was inexplicably shut out by Facebook. Croakey Health Media, a not-for-profit site that provides valuable information on COVID and Indigenous medical issues, got the back of hand from both companies, without an explanation," he writes.

Although the ACCC allows smaller publications to bargain collectively, there is also concern that the code favors dominant media companies.

Such a legislation should "explicitly protect and enhance diversity of media ownership," journalist Eric Beecher told the Australian senate when the bill was being drafted.

(With inputs from The Times of India and Financial Times)

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