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Australian media legislation poses concerns about ‘cash for clicks’

The British computer scientist known as the inventor of the World Wide Web, Timothy Berners-Lee, says Australian proposals to make tech giants pay for journalism could set a precedent that makes the Internet unworkable as we know it. “In particular, I am concerned that the code risks violating a fun

Australian media legislation poses concerns about 'cash for clicks'

The British computer scientist known as the inventor of the World Wide Web, Timothy Berners-Lee, says Australian proposals to make tech giants pay for journalism could set a precedent that makes the Internet unworkable as we know it.

“In particular, I am concerned that the code risks violating a fundamental web principle by requiring payment for links between certain online content,” Berners-Lee told a Senate committee that would scrutinise a bill that would create the News Media Negotiating Code.

It’s a question separating supporters and opponents of the new Australian law: would it essentially allow Google and Facebook “pay for clicks” and could it be the beginning of the end of free access?

In the European Union, where officials and lawmakers are drafting sweeping new digital legislation, the battle is being watched closely.

Google claims that the regulation allows it to pay for clicks. Google regional managing director Melanie Silva told the same Senate committee that she was most worried about reading Berners-submission Lee’s last month that the code “requires payments just for links and snippets.”

“The concept of paying for appearing purely in our organic search results to a very small group of website or content creators sets a dangerous precedent for us that presents unmanageable risk from a product and business model point of view,” Silva said.

Facebook regional vice president Simon Milner accepted that “entirely uncapped and unknowable” was the possible expense for news under the code.

Australia’s code uniquely provides a safety net for negotiation. An arbitration tribunal will prohibit digital giants from exploiting their dominant bargaining positions by providing take-it-or-leave-it payment deals to news businesses for their journalism.

The panel must make a binding decision on whose best-offer wins in the case of a standoff.

The monetary value of public interest journalism has yet to be identified, said Peter Lewis, director of the Australia Institute’s Center for Responsible Technology think tank.

“Lewis said, “The reason it’s like an ephemeral phase, if you like, is that nobody’s ever tried this before.

What do you value the absent ads of fact-based news? News was still valued on the basis of the amount of advertisements that the outlet might sell. “We are now trying to work out the value of public interest journalism because Google and Facebook have dominated the advertising market and taken that out of the equation,” Lewis said.

By speeding up discussions on licencing content deals with Australian media companies through its own News Showcase model, Google has responded to the threat of mandatory arbitration.

Facebook replied Thursday by banning Australian news from being viewed and shared by users.

After weekend talks with Facebook CEO Mark Zuckerberg and Sundar Pichai, chief executive of Alphabet Inc. and its subsidiary Google, Treasurer Josh Frydenberg amended draught legislation to make it clear that the platforms will not be charged per news snippet or connection.

We never expected it to be that… If the arbitrator oversaw a contract between a TV station and one of the digital platforms, they will, for example, make the digital platform pay 2 cents for each click over the next year, Frydenberg said. Never has that been the goal. The plan was always to have a lump sum payment and that is what we made clear in the code.

Dan Stinton is Guardian Australia and New Zealand’s managing director, negotiating a licencing arrangement through Google’s News Showcase.

Stinton said Google has gained from news through interaction with journalism-related search users, Google’s customer data obtained from publishers, and its share of revenue from advertising published with news articles.

“Google has been prosecuting an argument that Search is asking them to pay for links, and that is not the case,” said Stinton.

“They don’t steal published content, but I think they use their market power to choose their own companies to the detriment of publishers, and that’s not right,” Stinton said.

It’s not only paying for search links and snippets, it’s paying for the full advantage that Google gets,” he added.”

Since it launched News Showcase in October, Google has signed pay deals with more than 450 publications globally.

New regulations aimed at taming the largest digital ‘gatekeepers’ have been introduced by the EU Executive Commission. Proposals making their way through discussions between representatives from the parliament of the 27-member bloc may be revised to incorporate elements of the model of Australia.

Similar digital changes are being planned by Britain, which recently left the EU, which include shaking up the relationship between web media and news publishers.

“There’s definitely an influence” from Australia, said Angela Mills Wade, executive director of the European Publishers Council, an advocacy organisation representing media companies. “It is being closely monitored by all those who have an interest in the result.”

The EU has also set out a way for publishers and news media to enter into licencing arrangements under updated copyright laws on online platforms. France was the first country to incorporate certain laws into domestic law, but Google initially baulked at payments. Nevertheless, a court forced it into negotiations with a publishing company that culminated in a process for individual deals to be concluded.

The demand for binding arbitration if payment talks do not lead to an agreement is one aspect of the Australian model that has drawn interest in Europe, which Google has opposed because it would give the company less influence.

Mills Wade said many leading EU lawmakers would like to add to the digital regulations an arbitration process.

“Given that the scope of publishers’ rights has been undermined by Google and Facebook, it is clear that regulatory measures, particularly the final arbitration mechanism, are required,” Mills Wade said. “Otherwise, most publishers will not have the bargaining power to conclude agreements.”

Other news payment agreements have been hit by Google, including a multi-year arrangement with tycoon Rupert Murdoch’s News Corp.

Mills Wade welcomed the offer, stating that it illustrates that Google places “enormous value” on news material.

“However, regulators in Australia, as well as in Europe, should not be misled into thinking that single deals are the answer to ensuring fair remuneration for all large and small publishers whose content is used by Google, particularly just before comprehensive laws come into effect,” she said.