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Nick Xenophon: It’s time to make digital titans pay their way

Written by Kieran Adair

On April 22, 2020
Nick Xenophon It’s time to make digital titans pay their way

(Article Source: heraldsun.com.au)

Facebook and Google have long siphoned ad revenue from our media companies. The only way to restore the playing field is to hit them with an annual $1 billion fee to fund journalism, writes Nick Xenophon.

After my spectacular failure to shift from federal to state politics in the 2018 South Australian Election, I kept waiting for a journalist to ask me what my biggest regret was from almost a decade in federal parliament.

Well, nobody asked, so I’m going to tell you anyway — because the source of my biggest regret is not only more important than ever, there’s now a once-in-a-lifetime opportunity to fix it.

And my abiding fear is that if we blow this opportunity it will be too late and the damage to our democracy incalculable.

When the Coalition’s media reforms came before the federal parliament in 2017, my vote, along with those of my colleagues, Stirling Griff and Skye Kakoschke-Moore, got the package through.

The government needed us because the Opposition and the Greens opposed the legislation.

Labor’s fear of a greater concentration of media ownership wasn’t unfounded. But they missed the much bigger picture — the existential threat to journalism was caused by the rise and rise of Facebook and Google.

Those two tech giants alone have, over the past decade, siphoned tens of billions of dollars of ad revenue from Australian media companies. They have used, parasitically, the content of Australian journos, paid for by local media outlets, in order to get eyeballs to their sites and, with it, rivers of gold of ad revenue.

It’s a business model of which even Charles Ponzi would have been proud. It is a business model that has broken the backs of Australian media companies — and the heart of Australian journalism.

In the last decade alone, more than 3000 Australian journalists have lost their jobs. Those numbers will soon swell by the hundreds with the demise of the iconic Australian Associated Press, and with regional and community newspapers hit even harder by COVID-19.

The deal that my team did with the government in 2017 included a $65 million journalists’ jobs fund for regional and smaller media outlets. It also involved the government directing the ACCC to undertake a world-first inquiry into the impact of digital platforms on Australian media.

The ACCC’s findings were handed down in July 2019, recommending new regulations to clamp down on the power of those tech giants, who together have a market capitalisation of more than $2 trillion (that is not a typo).

The Australian government has announced a landmark move aimed at shielding traditional media from digital dominance by tech giants like Facebook.

“Facebook HQ” by eston, https://flic.kr/p/4Dh4vT. License at https://creativecommons.org/licenses/by-sa/2.0/

And just this week Treasurer Josh Frydenberg announced that because Facebook and Google haven’t come to the party with a voluntary code, he will be implementing a mandatory code to force them to share advertising revenue with Australian media companies; revenue that is estimated to be more than $5 billion a year — with only a fraction of that paid in tax thanks to complex offshore tax arrangements.

So, you may ask, with the above encouraging developments, what’s my problem?

My biggest regret is that I should have held out for a better deal.

The ACCC inquiry was great, but it essentially told us what Australian media outlets well knew already — that Facebook and Google were killing their businesses and the jobs of thousands of local journalists.

I regret that I didn’t hold out for an immediate levy on Facebook and Google to go straight back — and straight away — to Australian journalism.

My biggest fear is the government, despite its good intentions, may not drive a hard enough bargain from these tech giants, which are worth more than the budgets of most nations.

Frydenberg laudably says he wants to “level the playing field”. The problem is the playing field has been scorched by the digital giants.

The only way to restore that playing field to anything approaching its former glory is to hit Facebook and Google with an annual bill of at least $1 billion a year to be dedicated to quality community-based and investigative journalism.

Anything less will see a continued descent into the dark ages for journalism, something so eerily predicted by George Orwell: “Journalism is printing what someone does not want printed: everything else is public relations.”

The time for “public relations” with Facebook and Google is over. Now is the time to make them pay back what they have taken from Australian journalism.

And if the government says it just can’t be done, that this is too radical, then they should just look at what they have done in recent weeks to deal with COVID-19.

The $130 billion JobKeeper package was all about keeping the fabric of Australian society together. A billion dollars a year for Australian journalism — coming from those who can most afford it — is not just about keeping journalists’ jobs, it’s about keeping an essential fabric of our democracy.

And that’s not just a bargain, that’s priceless.

Nick Xenophon is a partner of Sydney-based law firm Xenophon Davis and former independent South Australian senator.

Written By Kieran Adair

Kieran Adair is a freelance tech writer who enjoys playing around with WordPress and his personal blog.

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