Senate’s dose of reality for Big Tech

Liberal senator Andrew Bragg. Picture: AAP

Call me old fashioned but I grew up in a culture where you paid for goods and services.

Supermarkets don’t take a can of tinned fruit from SPC and give it away for free.

That’s why I am staggered that Big Tech companies like Google and Facebook would think they could get news content for free from news organisations and profit from advertising on the back of it.

Australian regulators have found that for every $100 spent on digital advertising, $53 goes to Google, $28 to Facebook and only $19 goes to the others. This loss of revenue has forced cuts to newsrooms, journalists to leave the industry and media outlets going broke and closing.

In the Senate hearings last month we heard Google was prepared to walk away from $4.9b in gross revenue in Australia rather than pay for journalism.

It was tantamount to blackmail, but fortunately there’s been positive progress in the past few weeks.

As a relatively new “utility”, Big Tech has largely escaped the regulatory scrutiny applied to banks, energy and telecommunications.

In the committee hearings last month, I asked Google whether the company had capital requirements. The answer was no.

I asked whether they were licensed. The answer was no.

And I asked whether they have minimum service standards. Again, the answer was no.

This is a light regulatory burden given the size and scope of the business in the lives of Australians. Big Tech are utilities.

On Friday, the Senate inquiry endorsed our world-first legislation which will bring Google and Facebook to the negotiating table to strike deals with media publishers.

The proposed laws restore a level playing field between Big Tech and media outlets.

It proposes a backstop to ensure digital platforms broker commercial deals with Australian media companies for the value they obtain from having news content in newsfeeds and search results.

The legislation is groundbreaking because it corrects the bargaining power imbalance that Big Tech has used to bully publishers into second-rate deals in the past.

Google has already agreed to pay for news content in France, but only after their government intervened. Yet some still question whether French publishers received a good deal or just took what they could get under the pressure of the pandemic.

Big Tech needs to find a way to pay in Australia, instead of making threats which simply underlines their monopoly status.

Andrew Bragg is Liberal senator for New South Wales, and was a member of the Senate committee that assessed the media bargaining code legislation