Tuesday, July 14, 2020

Free News for Facebook and Google May Soon Be Over


Australia’s competition regulator will this month publish draft rules forcing the two U.S. tech giants Facebook and Google to share revenue generated from news with the original publishers, including Rupert Murdoch’s News Corp. Bloomberg reports a final version of the code, the first of its kind in the world, is due to follow soon after.

Between them, Facebook Inc. and Alphabet Inc.’s Google have a dominant position in the online advertising market and that has been under intensifying regulatory and political assault in the U.S. and Europe, with Australia now adding another front of attack.

Should watchdogs in other markets follow Australia, it would chip away at two of the most wildly successful business models of the 21st century, built largely on content free-for-alls. Facebook and Alphabet have combined market values in New York of about $1.7 trillion.

“This would be a major shot across the bow from a regulatory perspective,” said Dan Ives, an analyst at Wedbush Securities in New York. “It could open up a Pandora’s box around monetization and sharing of data.

In an interview, Australian Competition & Consumer Commission Chairman Rod Sims said he knows of several counterparts overseas who are considering taking similar steps. With traditional media hemorrhaging jobs and facing an assault from populist politicians alleging fake news, the 69-year-old is swinging the pendulum back in the publishers’ favor. To Sims, it’s about more than simply forcing businesses on his beat to play fair.


Traditional media companies have long complained their content is being exploited by digital platforms without due compensation. But that’s only part of the picture.

While platforms and publishers all compete for web clicks and eyeballs that can be turned into advertising revenue, they’re also allies of sorts. News stories, or even just links to them, are part of the appeal of Facebook and Google, helping them keep visitors engaged and vacuum up more data. The tech giants, in turn, direct traffic back to the publishers’ websites.

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