Australia has told Google and Facebook share profits with news media companies. France and Spain had earlier done so. Will India follow the suit?
Novel coronavirus pandemic has pushed news companies into an economic crisis as the cost of news gathering, fact-checking and delivery rise while revenue has declined sharply. This means they have to let go of people which in turn means they will have fewer resources to deliver what citizens need more of: authenticated news.
Some experts have estimated that the number of news staffers laid off is over 30,000 globally. Google and Facebook which display news gathered and processed by media companies and earn billions out of. They spend next to nothing on either sourcing the news or presenting it.
This situation calls for an immediate intervention of governments world over. The good news is that some countries have begun this process. France took the lead, followed by Spain. Now Australia has ordered tech giant Google and social-media mogul Facebook to pay for the news content it poaches on from media houses, whose revenue has dried up due to coronavirus-induced lockdown.
Google and Facebook dominate the dissemination of news content beyond the geographical reach of the traditional media. They established their dominance over the digital business through years of strategising and making the news organisations compete with one another for the top slot in search results on these platforms.
The model has worked well for Google and Facebook as they have become champions of something they never produce. Google uses Google News – its aggregator – and Google amp for news dissemination showing advertisements on individual pages and sharing a part of ad revenue with the original news producer that is traditional media.
Facebook too forced news organisations to work on the revenue-sharing model. Facebook lets media organisations post news content on the social media page and shows advertisements of its own choice. A part of the ad revenue goes to the news producer.
But there is a massive flaw in this business model. Google and Facebook walk away with nearly all the profits from the content they never produce and the original creator gets only proverbial peanuts as their share of the revenue.
On the other hand, news organisations hire journalists, technical staff and invest hundreds of crores to put in place a system for news content generation. Then there are news agencies from which traditional news organisations buy news. All the investments are done by news organisations and companies like Google and Facebook walk away with nearly all the profits.
This new trade imbalance between media houses and Google and Facebook was not questioned before for some reasons but now the coronavirus-induced economic crisis has posed a question of survival for most of them.
France, one of the worst-hit countries by novel coronavirus pandemic, ordered Google to pay the publishers for using their news content in its news aggregation, search and suggestion pages. Taking a leaf from a new European Union Copyright Directive, the French competition authority told Google to negotiate payments with news organisations.
Spain too followed its European neighbour. But Google retaliated in Spain, which stands devastated under the impact of novel coronavirus pandemic. It was already going through economic distress before the pandemic hit the nation.
In Australia, the competition and consumer commission has said it will draft new rules making provision for fair compensation to traditional news organisations from the internet and social media giants Google and Facebook for using their content.
Australian moves come after an attempt to evolve a voluntary code for fair compensation failed apparently due to resistance from Google, and Facebook, which has protested the Australian order saying it has already invested $100 million in news media of the country.
There is growing sense in other countries like the US and Germany for a similar move. A journalism competition and preservation law is up for consideration before the US Congress. If it passes the law, news organisations would be allowed to negotiate their rates with Google and also Facebook. This may set an example for the rest of the world to follow.
India has not made a move yet but it cannot remain a silent spectator to this imbalance even as India news organisations crumble under revenue pressure. News media play an important role in democracies, they are called the fourth pillar.
A creaking fourth pillar is a direct dent to the edifice of democracy. It’s imperative that the Indian government now work with the internet giants to restore the balance and enter into a profit-sharing arrangement with the companies that invest money and resources in news gathering.