Tech giants pilfering news content must be made pay

The upcoming closure of Australian Associated Press — the nation’s news wire — after 85 years of good service needs to be understood by the Morrison government as a serious and overdue wake-up call. The closure of the agency that has been the “first responder” of Australian journalism since Joseph Lyons was prime minister and Don Bradman was batting should also concern every citizen with an interest in politics, finance, the courts, coronavirus, national security, the environment, travel and the world in general. AAP has been known for its timely, factual and comprehensive reporting.

Those with most to lose from its closure, ironically, are the naive, complacent individuals, who blithely say they’re happy “to get all the news from social media” and would never think to pay for quality news coverage.

What they get on social media, in reality, is a skewed mishmash of content pilfered from newspapers and broadcasters, and filtered through the tech giants’ opaque echo chambers. Across time, such a pattern will produce a less informed society, less engaged in our vibrant democracy.

On Wednesday, AAP chairman Campbell Reid, who is also a News Corp Australia ­senior executive, pinpointed the reason the wire service was closing. The detrimental impact of digital platforms on media companies had reached a tipping point, he said. The unfettered market power of Google and Facebook and the significant imbalance in bargaining power had devastated media business models. Tech giants were taking and not paying for vast swaths of content produced by media companies and using it to generate billions of advertising dollars. “That is at the heart of why AAP is closing. No one should kid themselves otherwise. Until the platforms start paying publishers for their journalism instead of distributing it for free for their own profit then we are going to, sadly, see a lot more bad news in the media sector.”

Last year, the Australian Competition & Consumer Commission made 23 recommendations to address the growing market power and anti-competitive behaviour of tech giants in Australia. Taken together, Google and Facebook have a market capitalisation larger than Australia’s GDP. The ACCC, in an eminently sensible recommendation, said they should share the revenue they reaped for using news stories created by Australian publishers, after negotiations to be conducted “fairly, reasonably and transparently”. In response, the Morrison government has said the parties must negotiate and if they cannot reach a deal by November the government will impose a code. The closure of AAP shows how urgent the situation has become.

The root of AAP’s financial problem is that too few media companies have opted to subscribe to its services. On Thursday, The Guardian and the journalists union, the Media, Entertainment & Arts Alliance, peddled false claims that News Corp Australia and Nine Entertainment wanted AAP shut down to hurt smaller rivals that relied on the wire service for news coverage. The Guardian’s claim, on which the union’s statement appeared to be based, is self-serving hypocrisy. The Guardian, Mr Reid disclosed, was “one of the very companies that slashed the amount it was prepared to pay for AAP. It is one of the organisations whose decisions have contributed to the closure of AAP.” Instead of engaging in such claptrap, The Guardian and the union need to face facts. The world’s creative industries, including serious news companies, are being “eaten alive by tech platforms profiting from other people’s content”, as Mr Reid said.

Too few of those clicking on to social media and taking what is dished up as “news” at face value realise the dynamics or the dangers. The situation is akin to a global conglomerate commandeering flour, sugar, milk, cocoa and other ingredients for nothing, mass-producing biscuits, raking in the profits and returning nothing to the producers. It would never happen in other industries but it has in news, such is the power of the behemoths. The government, with the nation’s long-term interest at heart, must hold them to account.