Facebook didn’t get very many “likes” this week around the world.
In the U.S., federal regulators and 48 state Attorneys General accused the social media giant of illegally stifling competition by either buying out or suffocating its competitors.
The California-based company bought rival companies Instagram and Whatsapp in recent years.
“No company should have this much unchecked power,” says New York Attorney General Letitia James.
But it’s new legislation announced this week by the Australian government that will be watched most closely by countries around the world, including Canada.
It’s called the News Media Bargaining Code and it would force Facebook and Google to negotiate fair rates for journalism.
Currently, the two companies use content from media companies (including Global News) in their news feeds.
And while executives with Facebook and Google have long argued they drive traffic to the media web pages, they don’t pay for the content nor do they share revenue from the ads they sell.
Australian Treasurer Josh Frydenberg says the legislation, if passed, will even create a playing field that has Google raking in 53 per cent of all online ad dollars in Australia, with Facebook pulling in another 23 per cent.
“This is a huge reform. This is a world first,” Frydenberg says. “And the world is watching what happens here in Australia. Our legislation will help ensure that the rules of the digital world mirror the rules of the physical world.”
In the September throne speech from Ottawa, Prime Minister Justin Trudeau’s Liberals promised to seek compensation from the tech giants similar to what Australia is doing.
Jeffrey Dvorkin, a long-time journalist and director of the journalism program at the University of Toronto, says it’s been a long time coming.
“The fact is, is that these large communications organizations have been making money off the backs of Canadian journalists for years,” he says.
“I think they can read these tea leaves as well as anybody. And they know that their time operating in the way they have is coming to a close.”
A recent report from News Media Canada found that between 2014 and 2019, newspaper ad revenue in Canada plummeted 43 per cent while Google’s ad revenue more than doubled and Facebook’s increased fivefold.
And the Canadian Association of Broadcasters predicts TV and radio will face revenue shortfalls of over a billion dollars by 2022.
Facebook and Google dispute all of this. Google warns that if the Australian legislation goes through, big media companies would have unprecedented access to the personal data of internet users. And Facebook has warned it might block Australian news content rather than pay for it.
Dvorkin says if either company decides to play hardball Down Under, the Australian government should reply in kind.
“It may be for a time to limit access among Australians to having access to Facebook, which would not be a very popular move, I’m sure. But there are ways of pushing back against these large media companies.”
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