The Australian Government's Proposed Internet Link Tax (For Everybody)

Last week saw a frenzy of reporting on the Australian Competition & Consumer Commission's (ACCC) proposed news media bargaining code, after Facebook announced it would pull all news from its platform for Australian users if legislation to enforce the code was enacted.

The reporting largely continued to frame the code as one driven by a burning desire to fund public interest journalism, and primarily designed to compensate major publishers for unspecified use of their content by Google and Facebook.

But is this framing really correct?

Evidence of the crime

What content is Google and Facebook meant to have misappropriated, and where are some specific examples? I don't mean to ask you, because neither of us know – do we? There are no visual aids in any ACCC documents or reporting which clearly illustrates this scandalous misappropriation of news content apparently happening at scale.

Which is a bit odd, isn't it?

If we focus on Facebook as the recent target of publisher ire, we quickly discover that when the ACCC talks about "news media businesses accepting less favourable terms for the inclusion of news on digital platform services", what it means by 'inclusion of news' is: links to news, not the news itself. Links posted by the publishers themselves, as Facebook emphasizes in their response:

Most perplexing, it would force Facebook to pay news organisations for content that the publishers voluntarily place on our platforms

With the misreporting on this proposed code, you could be forgiven for thinking that Facebook is literally stealing news from publishers, republishing it, and depriving them of revenue.

Here's The Guardian unfortunately conveying that very idea in a recent explainer:

This deliberate conflation of links to content with news content itself only serves to leave the reader with the incorrect impression Facebook is lifting news content.

If the situation were made clearer, readers would understand that what the Australian Government is proposing is an internet link tax.

"It's not a link tax, they're using content from publishers!"

You mean like this?

There are a few interesting thing to note about these news posts (which publishers voluntarily post and users regularly share):

1. publishers choose the content - the title, description, and image are all defined by a website owner or publisher. They choose what is shown, and in fact have to do extra work to make sure this is what gets displayed on Facebook
2. publishers can specify nothing at all - in which case it will just display a basic, undecorated link
3. publishers don't give the news away here - these are designed as teasers to get you to click through to their site, read the content (and load ads around the content). If you want to know the details of the captain's final call, guess what you have to do?
4. users sharing these links is the aim of the game - publishers main goal is to increase sharing of their teaser content, as that drives traffic numbers and ad revenue on their own sites

So these are still just links. Let's call them fancy links. You could even think of them as free samples to entice customers through a shop door.

Facebook isn't using news content to divert potential readers away from publishers; publishers are creating, specifying and publishing fancy links on Facebook to draw more readers away from Facebook to their own sites.

(It's also easy to prove no content is being misappropriated by virtue of the fact no laws are being broken (and Australia has strong copyright laws), which explains the drive around new law-making).

An Australian Government Internet Link Tax

The code seeks to force Facebook to negotiate a fee to publishers for the fancy links publishers themselves post (and their readers share) on Facebook.

The only content to negotiate over are these fancy links, and if we accept for a moment each of these links represents valuable news content in itself, then the scale of the fee would roughly map to the number of links a publisher has on Facebook.

It is a crude approximation, and this kind of calculation has many vulnerabilities, but I'm not proposing to solve the problem here, especially considering the ACCC decided it was too difficult for them to calculate (hence the requirement for good-faith negotiations within 3 months, with the threat of forced arbitration as a circuit breaker).

While all manner of complicated commercial formulas could be applied in actual negotiations (the ACCC broadcasts this as a desired feature as the code allows for "commercially negotiated outcomes suited to different business models"), these could still all be calculated back to a 'Cost Per Link', giving industry insiders an overloaded 'CPL' acronym to consider – not that anyone outside the negotiations would have access to the final details.

But speculating more deeply on negotiating minutia risks missing a much broader, important philosophical point:

The code seeks to normalise through legislation the concept of links triggering legal and commercial obligations.

It really can be thought of as a kind of internet link tax – whose operation is facilitated by government but whose proceeds are delivered to private publishers (the ABC and SBS are deliberately excluded).

Noble Rent Seeking

With no satisfactory answer to 'What news is being used?' proponents seem eager to put most energy into cultivating a sense that, even if the code could be considered rent-seeking, it is noble rent-seeking.

Noble in the sense that Google and Facebook as targets are increasingly on-the-nose and the beneficiaries are presented as the embodiment of public interest journalism.

One takeaway from the narrow public debate is 'If you're not on board with the code and nit-picking details, you're not interested in public interest journalism."

Another is that the code is not primarily about direct news content being misappropriated, but about marketplace monopolists receiving indirect benefits of news.

Isn't that curious? Maybe that's why there's no visual example of misappropriated news?

Because it doesn't exist.

"Okay, news isn't directly being used. It's actually about indirect value and market dominance, and you're missing the point."

To address the small matter of not being able to visually present one example of news being misused, ACCC explanatory documents and reporting from publishers who stand to benefit conflate 'news' with 'links to news' and focus on indirect over direct benefits.

In section 4.8 of the ACCC's Q&As: Draft news media and digital platforms mandatory bargaining code [pdf] it states (my emphasis):

The code’s use of final offer arbitration recognises the significant challenges involved in setting a price for the inclusion of Australian news on digital platforms services. While digital platform services such as Google Search and Facebook News Feed do derive some direct monetary value from showing advertising alongside news, much of the benefit that these services derive from Australian news is indirect.

We see a drift away from the idea of 'directly benefiting from news', to 'indirectly benefiting from (links to) news'.

These indirect benefits are outlined for us. Bonus points if you can mentally replace 'Australian news' with 'links to Australian news' while reading:

Such indirect benefits include: the public perception benefits of being known as a provider of Australian news; the ability to attract and retain digital platform users on the basis of featuring Australian news; and the value of user data collected through the presence of Australian news, which can be used to improve the services digital platforms provide to users and advertisers.

The implied claim here is that Facebook is used as an active, primary news destination and derives significant benefits from it.

But the reality is Facebook is a passive way to receive links to news content shared by users, groups and pages you follow.

This subtle distortion – that Facebook is a (public interest) news destination – is amplified in other supportive reporting through misuse of survey data, such as from the 2020 Digital News Report, which finds a significant percentage of respondents nominate 'social media' as a source of news:

In The Guardian's explainer article they cite this study, claiming "About one-third of Australians get their news from Facebook, according to the Digital News Report".

But hang on. What does 'get their news' and 'sources of news' actually mean?

Are we meant to infer there are a large number of users who just settle for news from the fancy links that exist in a Facebook newsfeed, skimming only the click-bait headlines, summary and image, never clicking through to the actual news story?

Even if that surprising conclusion was the case, it would be hard to argue those users represent a valuable news audience.

The more likely case is that when respondents are asked whether social media is a source of news, they recall that they do click through on news articles shared by their social network, and answer 'yes'. Keep in mind these respondents – by seeing, clicking and visiting a publisher's website – become part of that publisher's audience, and in doing so participate in that publisher's ad-based revenue model.

Okay, maybe they still get their actual news from publishers but... market dominance!

Here's The Guardian again in that explainer:

Google and Facebook are gateways to the internet for almost every Australian, so news companies have no choice but to distribute their journalism via these platforms

But as we've demonstrated, they share links to their journalism, rather than the journalism itself.

Guess what else? News companies apparently have a choice with Twitter (it's not called out as a beneficiary of marketplace dominance) and those news companies (and their readers) share links to their journalism on Twitter in exactly the same way.

Structural issues fixed by a bad philosophical idea?

The issues of how to publicly fund journalism and deal with tech monopolies are incredibly important. Public interest journalism and the fourth estate are in dire straits – but the causes are numerous and none relate to fancy links being shared on whatever happens to be the dominant social platform of the age.

Remember fancy links are still just links, and links are a fundamental aspect of the open web. The right to freely link to – and comment on – content across the web is an essential aspect of a modern digital society.

Using the cover of very real structural issues to propose a bad philosophical idea – that the mere act of linking should carry new legal and commercial obligations – does not signal good-faith intent around this proposed code.

Commentators who engage with this code in a simplistic and self-interested way are at risk of championing a philosophical shift in how we approach the web which will have ramifications we may all live to deeply regret. Ramifications which will live on beyond the rise and fall of numerous Facebooks.

How bad could it get? Think the unthinkable, and let me play you a song.

The proposed code currently only targets two specific entities: Google and Facebook. (Much could be said about the soundness of writing laws naming specific companies).

But it explicitly opens the door to new platforms. Under 1.2 of the draft code Q&As it states:

Digital platforms must participate in the code if the Treasurer makes a determination specifying that the code would apply to them.

Actually, why isn't Twitter listed?

It's an exceptionally news-driven platform, especially when you consider hashtag communities like #auspol. Voracious readers and sharers of news engaging aggressively with each other and prominent, highly-active news personality accounts.

1.2 of the draft code Q&As continues:

Other digital platforms may be added to the code if they hold a significant bargaining power imbalance with Australian news media businesses in the future.

Ah, Twitter is not listed because they don't hold a significant bargaining power imbalance with Australian news media businesses. Right, makes sense.

So news media businesses aren't forced to distribute their journalism on Twitter as they have to on Google and Facebook?

But they do?

Oh hang on. Because there is no imbalance these news media businesses have negotiated commercial deals with Twitter to get paid for any links to their content appearing in a Tweet?

But have they?

Not hearing a peep about a 'reasonable' Twitter negotiating a deal with Big News in this public debate suggests they haven't.

If so, does that mean they've already correctly priced the value of fancy links? At zero?

Returning to the code, the provisions for adding new digital platforms clearly indicate companies like Twitter will almost certainly be added.

(Perhaps Twitter's omission is as much about political strategy as it is about commercial rationale – a more engaged, vocal and media-literate community would quickly reason that links in the form of Twitter cards do not constitute misuse of news, and in fact represent enticements to visit publications: a.k.a marketing.)

Other platforms like LinkedIn and Reddit would surely be under consideration.

But of course there's a test related to who will be a target of this rent-seeking. The legislation specifically states, under Section 52C (2):

In making the determination, the Treasurer must consider whether there is a significant bargaining imbalance between Australian news providers and the group comprised of the corporation and all of its related bodies corporate.

But hang on, what's this clause immediately after it, under Section 52C (3)?

The determination is not invalid merely because of a failure by the Treasurer to comply with subsection (2)

Oh my.

Section 52C (2) is in fact a lie, and the ACCC's coverage emphasising that the addition of digital platforms is based on 'significant bargaining imbalance' is a distortion.

With this legislation, the Treasurer can force any digital platforms to negotiate with Australian news providers.

Any.

At this point it feels like every aspect of this code has become meaningless. News is revealed to merely be links to news, direct benefits are revealed to be vague, indirect benefits and now even that lofty noble goal of redressing 'significant bargaining imbalances' is revealed to be a goal of targeting, well, any website at all if Frydenberg fancies.

Any website at all.

That sounds crazy, but let me play you a song. I'll play it to illustrate an existing business model that could easily be applied to this brave new world where 'links = content = control'.

I'll play it in a little startup office. It'll be a quality tune from a small band that never gets airplay.

Because I'm playing music in an office, I'm required to get a music license from OneMusic, which is now the major licensing body for music usage in Australia. I could play that song all day, and I believe the band would never get a dollar from my use, because the license fee is largely determined by radio play (among other sources). Guess who strongly influences radio airplay?

It's a wonderful system, because of course it would be impractical to calculate and properly reward every individual artist based on the music use of hundreds of thousands of  businesses. At that scale the system has to undertake crude approximations and necessarily favour certain parties.

OneNews

Imagine a system where website owners who 'used' Big News (by simply linking to its content, or writing stories which incorporated aspects of its content as part of critical commentary, for instance) could easily pay a one-stop, annual licensing fee for the privilege.

They are after all deriving benefits from the journalism created by Big News, regardless of whether they're engaging in fair use and breaking no copyright.

Let's call it 'OneNews'.

While initial deals can be easily negotiated with major platforms, that still creates an unjust situation where a whole raft of small sites, blogs and even other independent news publishers benefit from Big News without contributing to it.

While there is no bargaining imbalance with these smaller sites, in aggregate they still represent a substantial 'use of Big News', and due to their number present inefficiencies for Big News in negotiating individual commercial terms. Faced with "any report" which explains this situation, the Treasurer could be convinced to disregard Section 52C (2) and remedy this situation.

At this juncture the formation of a licensing body like OneNews to capture the long tail of licensing revenue makes a lot of sense, doesn't it? This licensing body could work very similar to OneMusic, but instead of using radio airplay as a major part of the revenue sharing calculation, it might use something like frequency of Facebook shares. It's a crude approximation which favours the Big News labels, but there is of course a precedent for this approach in the music industry.

In this possible scenario the code has seen further tweaks to accommodate an arbitration and reporting system which is workable for this next over-reach around content licensing – to squeeze the last dollars out of the 'long tail' of news-focused online sites, blogs and forums.

If you think this near-future possibility sounds ridiculous you're resisting thinking the unthinkable. You've forgotten that at this point we've legally created the new reality that even linking to content requires payment. You've failed to realise that as the internet's attention market gets even more crowded, sophisticated and compelling, Big News will do anything to seek more revenue.

Anything's fair game now isn't it? Who will stop them? Who will report on minor but transformational tweaks to this code, and any dissent around over-reach and the suffocation of civil society debate when the very commercial sleight-of-hand that can enable it has as major beneficiaries all those Big News publishers?

How far would you go to seek more revenue, and greater control, over every aspect of your content? (Maybe you're just not cut-out to be a ruthless press baron.)

More revenue... and greater control?

Well of course there would be licensing rules around mandatory participation in OneNews for any digital properties involved in discussing news. It's a commercial contract, and there may be clauses around how you engage with Big News content that could trigger penalties, such as the withdrawal of a right to link to or write commentary based on a publisher's content. We have established that linking is potential content misuse, remember?

Also consider the minimum standards set by the code "allow news media businesses to prevent their news being included on any individual digital platform service", regardless of "whether or not a news media business elects to commence bargaining with a digital platform".

When a specific clause like this is introduced, it's worth reasoning about why it's included. It is highly unlikely Big News would exercise this clause in marketplaces where it is commercially damaging (such as Facebook and Google) but what about smaller digital platforms – say independent news sites, blogs and forums – that may venture into scathing commentary and analysis about propagandistic output of Big News content?

Yes, key aspects of this legislation clearly demonstrate the current code is focused on large digital platforms, involved arbitration, and questions such as algorithmic insights that are not relevant to an imagined birth of something like OneNews, but the philosophical and legal groundwork is certainly laid down by this code.

Recall 52ZW of the draft legislation, which states in part:

an arrangement between 2 or more registered news business corporations for the purposes of negotiating with a responsible digital platform corporation in relation to covered news content is specified and specifically authorised.

The Big News version of record labels banding together to form ever more broad, industry licensing bodies?

This is emphasised in 2.3 of the ACCC's Q&A document, which states:

The draft code would allow news media businesses to bargain with a digital platforms either individually or (more likely) as part of a collective. Bargaining as part of a collective would allow smaller news media businesses to negotiate from a stronger position than negotiating individually. Collective bargaining is likely to also reduce costs for individual news media businesses, and allow groups to pool resources and expertise during the negotiation process.

We may wonder which publisher might lead these group negotiations as part of a collective, and helpfully draft the additional commercial clauses around licensing violations.. (Also – just as an aside – you find odes to the wonders of collective bargaining in the strangest places don't you?).

"No Comment"

To round out a dystopian near-future discourse apocalypse, consider the special focus in this code around 'flexible moderation tools' for content created by a registered news business corporation on a digital platform service.

We are told this is strictly about the ability to manage commentary on content directly posted by publishers on digital platforms. News organisations which have a tendency to actively distort or push political agendas may feel compelled to actively filter out all but the most mild commentary on their news articles.

With a flexible comment system, they can proactively block and censor any and all users and critical commentary, fabricating a sense of positive groupthink around their news output - itself a powerful tool of manipulation.

Of course, internal discussions within the Morrison government and the ACCC have revealed an understanding they could go much, much further with comment moderation dictates if they wish.

Consider Example 4, taken from the Exposure Draft Explanatory Materials (I've replaced the fictional organisation AIC with News Corp Australia to make the example really sing):

News Corp Australia creates its own Facebook page to promote its breaking stories to a wider readership. News Corp Australia wishes to disable all comments on its stories posted to this page in order to most efficiently meet its compliance obligations with other laws and to reduce its operating costs.

Facebook provides News Corp Australia with flexible content moderation tools so that it can do so. News Corp Australia requests to the contact that the responsible digital platform corporation for Facebook has provided under this Part to be provided with the same flexible content moderation tools with respect to its stories when they appear in the news feed of any Facebook user.

Imagine that scenario: one where publishers have so much power over their snippets that they can even control what your own family and friends can say on links you share on your feed?

That's reasonable isn't it? We've already established these 'links to news' trigger commercial and legal obligations, so try to argue why they shouldn't have that totalitarian control over commentary around their 'news' anywhere it appears?

But what's this that follows?

Facebook refuses this request as this is not required under this Part.

Ah we can rest easy then. Can't we? Once the philosophical idea of dollars and control over mere links has been set, there wouldn't be any subsequent push (by any political / media power factions) to allow that type of comment control outlined above.

Would there?

What do you think?

Motives - A burning desire to support public interest journalism?

So much of the storytelling around the code is focused on the idea this is all driven by a burning desire to support public interest journalism, led by the ACCC as a neutral regulatory body.

But while the ACCC is strongly identified with this code, the reality is this is a Morrison government agenda.

The ACCC was asked by the Australian Government to develop the code on 20th April, 2020, and more importantly:

The draft code has been developed by the ACCC in close consultation with the Department of the Treasury and the Department of Infrastructure, Transport, Regional Development and Communications.

This is an initiative and creation driven by Scott Morrison, Joshua Frydenberg and Michael McCormack with assistance from the ACCC. A collection of individuals and entities hardly known to have a burning desire for public interest journalism.

The ACCC's approval of the Nine / Fairfax merger and Murdoch's acquisition of a whole swathe of regional papers are actions which seriously call into question any claim of concern for public interest journalism.

And with the Australian Government's raids on journalists, war on public interest whistleblowers like Witness K and Richard Boyle, and general disregard for investigative journalism, it's clear other motives perhaps provide better explanations for what is driving forward this legislative agenda.

As many have observed there are honest, simple approaches to resolving marketplace imbalances and supporting public interest journalism: closing tax loopholes and establishing funds and grants for grassroots, regional, local and independent media as a priority.

But these solutions would not be looked on kindly by friendly lobbyists, and Big News itself, who at the end of the day is motivated not by noble principles of public interest journalism itself, but by a primitive desire to survive and dominate at all costs.

In Conclusion

It is not just Facebook and Google who are on the cusp of entering a controlling relationship with Big News, it is – through a fundamental philosophical shift in how we are told to think about links – our entire society and every citizen within it who shares content online.

As digital citizens we've been served poorly by the fourth estate, which has made little effort to properly consider the ramifications of this bad code, made no effort to journalistically recuse themselves in some fashion (say by ceding significant editorial and content control on the issue to independent commentators), and not even bothered to display disclosures that they are major beneficiaries of this rent-seeking.

In their eagerness to rally themselves and their readers to their immediate cause, they may be unintentionally leading all of us in to a digital trap.

While the emergence of OneNews and a Big News content dictatorship is not instantly created by the code, we're certainly swimming in that general direction, and when an already hyper-concentrated, influential, corporate media ecosystem is granted significantly increased power over the entire internet, we drift closer to a kind of societal discourse vortex, circling the whirlpool slowly at first, until it is realised – too late – that we cannot escape.