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Treasurer hands News Corp another win - but will it help him? Just ask Malcolm

Opinion

News Corp’s claims about Facebook and Google don’t stack up – but that hasn’t stopped the Federal Government handing the Murdochs yet another political win, this time in their battle against the tech giants, writes Bernard Keane.

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Earlier this week, Treasurer Josh Frydenberg and Communications Minister Paul Fletcher got up and struck a blow for foreign multinational News Corp in its ongoing war with the tech giants that have used innovation and the internet to wreck the Murdochs’ media business model.

The big tech companies are deeply unpopular, usually with good reason. But the government has recycled demonstrable lies peddled by News Corp about how it is being robbed by Google and Facebook, with the aim of helping prop up News Corp’s failing Australian media businesses.

News Corp charges that when Google (mostly) and Facebook use its headlines and automatically generated “snippets” of News Corp stories on their sites, they are stealing content, and should be made to pay for it via a licence fee that will “reflect the financial benefit digital platforms derive from using snippets”.

It also complains that longer “snippets” deter people from clicking through the attached link to the original story because they get all they need from what’s displayed.

Except the Australian Competition and Consumer Commission’s (ACCC) digital platforms inquiry found that News Corp’s claims don’t stack up.

Headlines and snippets aren’t theft of content: “generally, digital platforms’ use of article headlines is unlikely to infringe copyright protections in Australia,” the ACCC noted. “Digital platforms reproducing a snippet of a copyright-protected news article does not infringe copyright protections if the snippet does not reproduce a substantial part of the article.”

And the ACCC found that the tech companies, media organisations and consumers all benefit from the use of snippets. Specifically, “media businesses benefit because a snippet provides context and an indication to the user of the value of that content, increasing the likelihood of consumers clicking through”.

Real-world evidence backed this up. “As a result of a German copyright law requiring Google to pay fees to publish snippets from news media websites, Google stopped showing snippets from [media company Axel Springer’s] news articles. Axel Springer noted that the lack of snippets led to a nearly 40% decline in referral traffic from Google Search and an almost 80% decline in referral traffic from the Google News user interface”.

Perhaps Frydenberg thinks that in aligning himself with News Corp, its editors and executives will promote him as a putative successor to Scott Morrison.

The ACCC also “does not agree that longer snippet lengths necessarily have a negative effect on referral traffic, with users remaining on an aggregator or search platform rather than clicking through to a news media business’s website”. As a result, it did not recommend that a mandatory licence fee be imposed.

Where it did agree with media companies is that they have little bargaining power with Google et al when it comes to the length and composition of snippets. They can block Google from automatically generating snippets, but beyond being able to “opt out”, they have no way of managing them, or maximising click-through.

The ACCC thus proposed the industry-led development of a code of conduct to be agreed between media and tech companies to address this “imbalance of power” and enable media companies to get access to data and negotiate more effectively with the likes of Google.

Such a code of conduct might also cover how revenue is shared “where the digital platform obtains value, directly or indirectly, from content produced by news media”.

How much value do digital platforms obtain from news content? Google doesn’t show any ads on its news feed, and “does not generally sell advertising opportunities next to search queries that are considered by Google as having a ‘news intent’”. In other countries where it has been ordered to pay fees, it has simply stopped carrying snippets if it can’t do so for free. In Spain, it shut down Google News.

Interestingly, the result in Spain — and one echoed elsewhere — was that smaller media sites lost a large volume of traffic while major media sites suffered relatively little loss. It would be to News Corp’s considerable advantage if that same result eventuated in Australia, with smaller competitors in an already marginal economic environment suffering a major loss in traffic.

None of these facts stopped Frydenberg and Fletcher, who have demanded the ACCC impose a mandatory code of conduct on the tech companies, backed by legislation, that would “get payment for original journalistic content”.

The word “content” was used repeatedly. Fletcher referred to “businesses acquiring content from another without the opportunity for a fair discussion about what they pay for it”.

“The ACCC”, Frydenberg said, “is going to be looking at the method by which the payment for content would occur.”

The tech companies of course are not using any “content” beyond the headline and metadata-generated snippets that are not considered content under copyright law. And in defiance of the evidence from the ACCC, Frydenberg reiterated News Corp’s claims that it “is very lucrative for the tech titans to use the original content on their website”, when they do no such thing.

No-one, and certainly no one in the mainstream media, called out the bizarre situation of the Treasurer publicly reiterating claims by a foreign multinational that one of the country’s key economic regulators — one in his own portfolio, no less — has publicly and at length discredited.

Nor did anyone note that one possibility as a result of Frydenberg’s action is that News Corp’s smaller, locally owned competitors suffer a massive hit on top of what the government has created with its lockdown restrictions.

Liberal politicians eager to hand wins to the foreign-owned News Corp are nothing new. Perhaps Frydenberg thinks that in aligning himself with News Corp, its editors and executives will promote him as a putative successor to Scott Morrison.

In which case, Frydenberg might do well to heed the fate of Malcolm Turnbull. Turnbull as prime minister amended the media ownership laws to help News Corp, and slashed funding to its enemy the ABC. And all he got from the Murdochs was an extended effort to overthrow him.

This article was first published by Crikey.

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