2020s >> 2021 >> no-1400-april-2021

Cooking the Books 1

Profit-sharing Aussie-style

When in February Facebook temporarily stopped Australian users seeing, posting or sharing articles from Australian newspapers there was widespread condemnation, and not just from Australia. Most presented it as a case of the people versus a tech giant. Julian Knight, the Tory chairman of the House of Commons Digital, Culture and Sports Committee, declared ‘We represent the people and I’m sorry but you can’t run a bulldozer over that’, adding, sounding like a left-wing activist, ‘and if Facebook thinks it’ll do that it will face the same long-term ire as the likes of big oil and tobacco companies’ (reut.rs/38n7cQJ).

The GAFA (Google, Amazon, Facebook and Apple) tech giants are unpopular in left-wing circles for a number of reasons: being multinationals, their tax-dodging, and for the way they mine their users’ personal information to attract advertisers by allowing these to aim ads tailored to the individual user. So, many anti-corporation activists joined in the dispute on the side of the Australian government. In fact, however, the issue was not the people versus a tech giant but a conflict of interest between two groups of capitalists over sharing out the revenue and profits from advertising.

Facebook depends for a large part of its income on selling space to advertisers. So do newspapers. As Facebook and Google’s audiences are larger and growing these tech giants have been more successful than newspapers whose sales have been dwindling. Some, however, of the advertising is placed alongside articles produced by newspapers. Newspaper owners have long complained about this:

‘For years, news organisations around the world have been pushing for fairer profit-sharing between themselves and the likes of Facebook and Google on news content distributed on social media platforms. Some of the industry’s leaders, like Rupert Murdoch’s News Corp, have won government support to propose relevant regulations’ (bit.ly/3qty4F9).

It was no accident, then, that the first move to try to force Facebook and Google to share some of their profits should have come from Australia as who there says ‘newspapers’ also says ‘Murdoch’. In April last year the government responded by proposing a law to force Facebook and Google to share some of their advertising revenue with Australian news corporations. Google complied but Facebook put on a show of strength. The government compromised by amending the legislation to provide for voluntary revenue and profit-sharing agreements to be tried first. The first one that Facebook negotiated was with Murdoch’s News Corp. The details have not been disclosed but no doubt Murdoch will be satisfied with his share.

That the issue was not one of the people versus a tech giant but one capitalist group against another should have been evident from the fact that the legislation was introduced by an openly pro-capitalist government which had no particular ‘ire’ against big corporations. Far from it. It was acting on behalf of one. Just as governments in Britain, Canada and other countries will be if/when they introduce similar legislation.

The Australian government made no attempt to disguise what it had in mind:

‘Australian authorities say they drew up the legislation to ‘level the playing field’ on profits between the tech giants and struggling publishers. Of every A$100 (£56; $77) spent on digital advertising in Australian media, A$81 goes to Google and Facebook’ (bbc.in/3kWcVSI).

Activists who joined in the chorus against Facebook were being used to help pick chestnuts out of the fire for the newspaper corporations, while Julian Knight is just a windbag.

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