Social media companies are not creators of news, yet their online platforms carry links to content produced by news and media organizations, driving users to their highly profitable sites. This has led to a long-running debate over whether social media companies should be paying for the privilege of providing such links to their users.
The dispute on Thursday last week took a new twist when the Australian government passed new legislation — the News Media Bargaining Code — that requires Facebook and Google to pay for news content carried on their platforms.
Google initially threatened to withdraw its search engine from the Australian market, but agreed to deals with local media companies before the law’s implementation.
Facebook, on the other hand, seemingly acting out of spite and without providing any prior warning, blocked all Australian news content from its services.
Responding to Facebook’s move, Australian Prime Minister Scott Morrison did not mince his words and vowed that his government would not bend to “arrogant” threats.
“These actions will only confirm the concerns that an increasing number of countries are expressing about the behavior of big tech companies who think they are bigger than governments and that the rules should not apply to them. They may be changing the world, but that doesn’t mean they run it,” he said.
The Canadian government has joined Australia and stated that it, too, plans to require tech companies to pay for the news on their platforms. With the genie out of the bottle, people can expect similar debates to unfold in other countries and a trend to form around making big tech pay for news.
Social media platforms possess an unsurpassed degree of penetration online. Non-traditional media can use links on social media platforms to expand their reach.
Online platforms are therefore intermediaries — vehicles — while media companies produce the content for consumption by the users of online platforms.
New media companies must spend a vast amount of money to produce news content, but the lion’s share of advertising revenue generated by this content is gobbled up by online platforms. Thus, online platforms enjoy a disproportionate amount of profit relative to the work that they perform.
In the Internet age, traditional media are forced to chase after an ever-shrinking portion of the pie, an unfavorable situation compounded by the uneven distribution of profits resulting from the business models of social media platforms.
Unable to support normal operations within such an environment, traditional media organizations throughout the world are facing an existential crisis.
Minister of Canadian Heritage Steven Guilbeault has called Facebook “highly irresponsible” for its Australian news blackout, which included blocking public service information, and has vowed to draft legislation similar to Australia’s.
The reason for Canada’s strong stance, despite the prospect of Facebook shutting down its news services, as it did in Australia, is because if the Canadian government fails to take timely action, the potential market imbalance caused by the current state of affairs is predicted to result in the loss of 700 jobs in Canada’s print media industry, which employs only 3,100 people.
A growing number of countries, including Germany, France, Spain and Brazil, are debating the issue. The EU is also considering legislation to protect privacy rights and enable the collection of a “digital tax” from tech companies.
The EU should consider enacting comprehensive regulations that protect national security, industry and the well-being of Europeans from the negative effects of social media.
Taiwan cannot stand on the sidelines of this debate. According to the latest available data from 2019, total advertising volume in Taiwan’s media industry was NT$76.1 billion (US$2.69 billion), of which digital advertising accounted for NT$45.8 billion, or 60.2 percent of all media advertising.
This is an astonishing rate of growth, given that in 2018, online advertising accounted for 54.6 percent. Online advertising now accounts for the majority of advertising within Taiwan’s media industry.
However, digital advertising revenue is invested in multinational social media platforms, such as Facebook and Google, while the amount of advertising dollars received by traditional media has dropped. As with other nations, Taiwan cannot afford to ignore this issue.
The main cause of the media industry’s reversal in fortunes compared with social media platforms is the vast scale at which these platforms operate.
Traditional media relies on these platforms to provide links to their content to increase click rates and disseminate news online.
The debate has thus coalesced around whether hosting links to news content on online platforms should be fairly remunerated.
From the perspective of news media, advertising revenue is needed to prop up their massive operating costs and provides impetus for growth. The industry says that this is the reason a reasonable fee should be paid for hosting their content on social media platforms.
Online traffic is the currency of the Internet age, and a handful of social media platforms hoover up the vast majority of traffic. These platforms, through big data, also understand the news content requirements of their users. The ability to accurately target and tailor news content to the interests of each user means that social media platforms have gained a monopoly position in the dissemination of visual media, newspaper and magazine stories, and other online media content.
This means that they are in an advantageous position in any negotiation for payment of content and can trample all over traditional media.
Online platforms, such as Google and Facebook, have argued that they simply perform the function of a conduit or portal for the transmission of news, and that the vast majority of media sites still operate their own independent Web sites, and can attract traffic and advertising to their sites on the strength of their content.
Online platforms do not profit directly from news content, therefore, they say, there is no requirement to pay for the links that they provide.
The argument sounds reasonable, except that the news content produced by media organizations is the intellectual property of those organizations.
Links to such content on social media and other online platforms is, in essence, taking somebody else’s product and using it to attract traffic to their services, which increases advertising revenue for the platforms. It is therefore right and proper that they pay.
Moreover, if the argument put forward by online platforms is allowed to stand, this would make a mockery of intellectual property laws.
One can see that the debate over payment of content is straightforward and the argument against it advanced by online platforms is utterly fallacious.
The world is on the cusp of entering an age when the Internet is omnipotent and omnipresent. Being relatively new, the online domain lacks clear rules or precedents. It is inevitable that this will lead to disputes, as the Internet, and social media in particular, has radically altered the ecosystems of entire industries.
The debate over the payment of content produced by traditional media is but one example of this phenomenon. Other debates sparked by the online revolution include issues about freedom of speech, human rights and the effect the Internet is having on people’s lifestyles.
An example is the different way in which democratic and autocratic nations view the Internet. Democracies view the protection of online privacy and online freedom as fundamental, whereas in autocracies, such as China, the Internet must be tamed, monitored and controlled.
Which side wins the battle will influence the course of humanity and civilization.
Solving the problems caused by the Internet will require governments, companies and citizens of the “free world” to work closely together to arrive at mutually agreeable solutions. To fail in this endeavor would mean ceding control of the Internet to a caustic combination of unaccountable transnational monopolies and mendacious autocrats. Failure is not an option.
Translated by Edward Jones
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