Learn from Australian effort to reform the asymmetry between Big Tech and news media

A conversation last week between the prime ministers of India and Australia encapsulated a far-reaching development in the regulation of technology and social media companies. Australia’s Scott Morrison discussed with Narendra Modi a legislative bill being considered there: News Media and Digital Platforms Mandatory Bargaining Code, which aims to correct the power asymmetry between companies such as Google and Facebook, and news media. This intervention is not an isolated instance. Across democracies, legislatures are trying to find ways to curb the power of Big Tech. This is a watershed moment.

Between the US and EU, Google, Facebook, Amazon and Apple have faced recent investigations into potential abuse of monopoly power. EU in December introduced a legislative proposal to regulate “gatekeepers” such as Google to curb unfair competition. The Australian initiative needs to be seen in this context. In December 2017, the Australian government asked its competition commission to conduct an inquiry into digital platforms with special focus on news and journalism. The inquiry concluded that digital platforms are not the “dumb pipes” they profess to be. This description is wholly inconsistent with their revenue models that depend on opaque algorithms to monetise data.

The process culminated in the legislative effort to force digital platforms to enter into contracts to share revenue with news platforms. It is an overdue step. Journalism is a public good and a pillar of democracy. Digital platforms piggyback on its content without sharing the associated costs. The subsequent diversion of advertising revenue has undermined traditional media, particularly regional newspapers. Australia is intervening to restore balance between digital and news platforms, which is indeed the right way forward. But the tactics will vary across democracies.

India presents a unique media market which reflects the country’s diversity. For example, media platforms span multiple languages. Therefore, while the Australian development is of special importance to India, it need not provide an ideal template for the way forward. What is a greater lesson is the attempt to change the existing rules of the game which if left unchecked will undermine democracy. Digital platforms have brought about huge social gains by democratising access. However, their growing size and revenue models have also had adverse effects, such as spread of fake news. It is this fallout that governments are trying to mitigate, to safeguard democracy. But the way in which Facebook abruptly blocked news on its site in Australia, impacting emergency services as well, underlines how ruthlessly  Big Tech will resist change.


This piece appeared as an editorial opinion in the print edition of The Times of India.


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