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World watches as Australian regulator rules on Facebook and Google

World watches as Australian regulator rules on Facebook and Google

Sydney : ACCC set to hand down preliminary report into digital platforms and whether they are competing fairly with traditional media . A titanic struggle is taking place between some of the world’s largest corporations.

In one corner is Google and Facebook. In the other is News Corporation. It’s not alone. It stands with most of the established media companies which have watched with growing horror as their advertising revenues have migrated into the coffers of the digital behemoths.

Alphabet, Google’s parent, reported worldwide revenues of US$33bn in the third quarter and is on track to top US$120bn in 2018, mostly from advertising. Facebook’s revenues topped US$40bn in 2017 and have continued to grow during 2018. In just 10 years, the platforms have gone from nothing to hoovering up the majority of advertising dollars in Australia.

In contrast, News Corporation and most media companies have seen their revenues draining way. It began with what used to be known as print media, but are probably now better described as news media sites.

Now the conflagration has spread to free to air television, which depends on advertising for their existence. Their content is often republished on sites such as Facebook and YouTube without compensation, diverting eyeballs and diminishing their value to advertisers.

According to the journalists’ union, the Media Entertainment and Arts Alliance, the media sector has lost about 3,000 journalist positions since the growth of digital platforms escalated about 10 years ago.

The loss in the newspaper sector has been the most severe, down from 23,472 employees in 2010-11 to just 14,678 by June 2017. Some new digital jobs have been created but the impact is a net loss.

The beef the media companies have is that they invest in the journalism while the digital platforms simply take their output and republish it on people’s feeds and within their own news products.

It’s a complicated relationship: on the one hand the news media companies acknowledge they need Google and Facebook to reach younger audiences, who don’t read newspapers, visit websites or watch broadcast television. On the other hand, the financial benefit of their hard work is going straight to these multinationals, and now threatens their very existence.

A year ago the government, after intensive lobbying from the big Australian media companies, asked the Australian Competition and Consumer Commission to investigate whether these multinational digital services have an unfair advantage in the market, and whether they are abusing their market power.

This week we will get the preliminary view of the ACCC.

Chairman Rod Sims’ approach will have far reaching effects on the Australian media in the future. It will be important globally. His views will be studied by regulators around the world, all of whom are grappling with whether and how to ensure Google, Facebook et al don’t lead to the death of important and much loved media in their local communities.

Here’s some of the suggestions that have been floated.