Murdoch winning against Google & Facebook in Australia?

Unless you’ve been living under a rock, you’ve probably heard of what is called a news media bargaining code which Australian government wants to use to force Google and Facebook to pay for news content produced by large media organizations.

If you are from Mars, you might think it is a good thing that Australian government asks tech giants to pay for local news content. However, the reality is different and blurry.

Media ownership in Australia

Media ownership in Australia is one of the most concentrated in the world. According to independent assessment, over 90% of the media sector is held by three conglomerates (technically 3 men: Rupert Murdoch, Kerry Stokes and Peter Costello).

The Media Interests snapshot below from the Australian Communications and Media Authority provides an overview of the main interests in major commercial television and radio networks and associated newspapers.

Newspaper ownership in Australia is even much more concentrated.  An international study led by US scholar Eli Noam found that Australian newspaper circulation was the most concentrated of 26 countries surveyed, and among the most concentrated in the democratic world.

Via News Corp, Murdoch owns a paper in almost every state and territory, including national broadsheet The Australian and Sydney’s The Daily Telegraph, Melbourne’s Herald Sun, Brisbane’s The Courier Mail and Adelaide’s The Advertiser.

The situation is not any better in pay or online TV sector either. For example,  Rupert Murdoch’s Australian flagship media group News Corp owns Sky News and  holds a lion’s stake in Foxtel – which has a monopoly in the pay TV market.

In order to reinforce the dominance of their own media empires, the media conglomerates stifle the growth of new media start-ups and cut off their reach to consumers. Successive governments from the both sides of politics have failed to address this problem because nobody wants to run head-to-head with the media. An independent inquiry into the media and media regulation in 2012, otherwise known as the Finkelstein report, described the landscape of Australian media as: “too concentrated in ownership, biased, vindictive, sloppy and at times unethical in its coverage of people and events”.

Government and media code

Australian government’s shortsighted policy dictated by media overlord Rupert Murdoch and the likes to turn back digital transformation and implement a transfer of power [and money] from Google and Facebook to these media moguls has mostly been disguised under this code.

Smaller publishers are not eligible for any payments under the proposed law, so large publishers obviously owned by Rupert Murdoch, Kerry Stokes and Peter Costello are the main beneficiaries.

The mandatory code has been lobbied for by Murdoch’s News Corp. Murdoch has been one of the Google’s most vocal critics, having previously called for the company to be forcibly broken up.

The code has been described by both Facebook and Google as “unworkable” as it is poorly written, misunderstands how technology works and it essentially requires tech giants to pay to government-nominated news companies to deliver them traffic, ad revenue and subscriptions.

Facebook News Ban

On Feb 18, Facebook blocked Australian users from sharing or viewing both local and international news content on the platform, and blocked Australian publishers from publishing their news on the platform both to domestic and international audience.

Both Prime Minister Scott Morrison and Treasurer Josh Frydenberg, who have spearheaded the media bargaining code written with the stone age logic to regulate today’s technology, rushed to blame and condemn “arrogant” and “wrong” Facebook.

The proposed law seeks “to penalise Facebook for content it didn’t take or ask for”, the company’s local managing director William Easton said.

“Independent experts and analysts around the world have consistently outlined problems with the proposed legislation. While the government has made some changes, the proposed law fundamentally fails to understand how our services work,” he added.

Google news ban?

Google has also said it will have no choice but to disable its search engine in Australia if the bill goes ahead in its current proposed form.

Speaking at a senate inquiry into the code in January, Google Australia managing director Mel Silva said the code breaks the fundamental principles of the web: unrestricted linking between websites.

“If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia.

“Withdrawing our services from Australia is the last thing that I or Google want to have happen, especially when there is another way forward,” she said calling the proposed legislation “unworkable”.

However, Google has recently started to make deals with large publishers, including with News Corp.

Web’s inventor against the Code

Sir Tim Berners-Lee, the inventor of the World Wide Web, in a submission to a Senate inquiry, said that Australia’s proposed law risks “breaching a fundamental principle of the web”.

“The ability to link freely – meaning without limitations regarding the content of the linked site and without monetary fees – is fundamental to how the web operates, how it has flourished till present, and how it will continue to grow in decades to come,” Berners-Lee said.

“There is a right, and often a duty, to make references”, he added, pointing to the significance of journalists and academics linking back to prior work.

So compelling websites to pay up when they share a hyperlink to another site could “would undermine the fundamental principle of the ability to link freely on the web and is inconsistent with how the web has been able to operate over the past three decades”.

“If this precedent were followed elsewhere it could make the web unworkable around the world,” he said.

“I therefore respectfully urge the committee to remove this mechanism from the code,” he concluded.

Murdoch’s influence in Australia

For example, the former Australian prime minister Kevin Rudd told a senate inquiry that Australian politicians are frightened of Rupert Murdoch.

Speaking under parliamentary privilege at Parliament House in Canberra on Feburary 19, Rudd said the “Murdoch mob” has been seeking “compliant politicians” and  Australian politicians were fearful of facing a “systematic campaign”.

“Everyone’s frightened of Murdoch. They really are. There’s a culture of fear across the country,” he said.

On October 10, Rudd created a petition to establish a royal commission into the strength and diversity of Australian news media – he called it a #MurdochRoyalCommission on Twitter.

Australians have watched with growing anger at what the Murdoch media monopoly is doing to our country. A cancer on democracy. Today I am launching a national petition to establish a #MurdochRoyalCommission. If you value our democracy, please sign here“, he said in a tweet. 

Rudd’s campaign against News Corp also coincided with Rupert Murdoch’s younger son James Murdoch’s interview with The New York Times where he explained he left the company because he was concerned its newspapers were disguising facts and endorsing disinformation.

With Facebook and Google and “compliant politicians”, News Corp is almost powerless due to diminishing public trust in its reporting.

Kim Williams, who ran News Corp in Australia between 2011 and 2013, described this as “News Corp has no influence with the public but an acute influence with politicians”.