Why the world may follow our lead on Google and Facebook

It's hard to overstate the importance of the news bargaining code introduced into Federal Parliament on Wednesday. I’ll try to give it the weight it deserves.

This law is a world-leading attempt to force Google and Facebook to recognise the value of "real news" – that is, journalism created by media companies and public broadcasters, in recognition of the role truth plays in a functioning democracy.

Pay day ... Facebook and Google will be forced to negotiate with Australian media companies. Credit: Getty

That’s why Nobel laureate economist Joseph Stiglitz last week said the world was watching Australia, as his own nation, the United States, struggled to agree on something as fundamental as the result of a presidential election.

This Australian law is needed because the business model of the media – journalism funded by advertising – has collapsed as the two giants of digital media have created a direct avenue to consumers based on their creepy capacity to observe our online preferences and behaviour. They have done so while fuelling their networks with the very same news content that their business model undermines, which they assert is available to lift and link without financial compensation.

In this way, the traditional media has become simultaneously both a competitor and a free resource for Big Tech.

As the media has deteriorated, so too has the fact-based public space where we used to make sense of the world, debate ideas and mediate our differences. Instead, the social network algorithms, powered by conflict and hyper-charged by anger, have pushed us into our own self-reinforcing tribes.

In the past year alone, hundreds of Australian mastheads have stopped printing and thousands of journalism jobs have disappeared, even as the public turned to traditional news outlets to guide it through the pandemic. In contrast, social media was awash with anxiety and conspiracy theories.

The consequences of this power shift globally are plain to see: the spread of disinformation, the rise of populists, the erosion of civility and the inability to deal with our most existential of challenges, such as climate change.

This law won’t solve all these problems, but it interrupts the trend. It provides a baseline for funding fact-based journalism by forcing a negotiation between Google and Facebook and the media companies and creating a safety net under these negotiations. If agreement cannot be met, both parties can put forward a best offer and an independent arbitrator will determine the most reasonable of the two.

What the news companies do with that income – and whether any increase for the ABC and SBS will be offset by reductions in government funding – remain to be seen. But if this law succeeds in creating an asset transfer from Big Tech to media companies to fund fact-based journalism, particularly in our regional areas, and promote more media diversity, then it will make our democracy demonstrably stronger.

This law is not some thought-bubble. It is the product of three years' work, an exhaustive inquiry by the Australian Competition and Consumer Commission, public consultation, iteration and refinement. It’s a model of the way policy should be developed.

It is part of a broader package of changes that will give citizens greater control of their own personal information, with a review of the Privacy Act also in train.

The fact that the law has been introduced by a conservative government with the vigorous support of News Corp Australia may stick in the craw of some, but the reality is all our major media companies support it. With the likely support of Labor and the Greens, this code should be seen as being beyond partisan politics.

Our elected representatives are not blind. They live every day with the repercussions of a Balkanised public square, where the loudest and angriest voices are heard and the fight delivers more eyeballs than the compromise. In working across the partisan divide to land this legislation, they will not only be bringing in world-leading laws to regulate Big Tech; they will be delivering a compelling counter to a self-destructive operating model.

As for Google and Facebook, both have threatened to downgrade their services to Australians if they are not happy with the result. Negotiations over summer will likely determine whether these threats are real.

An alternative approach would be to recognise that a social network is only as strong as its people. Respecting their wishes through their elected representatives, in a way that makes their democracy stronger, would be in their long-term interests too.

Peter Lewis is director of the Australia Institute's Centre for Responsible Technology.