Australia’s Confused Tech Regulators Are Cracking Down on Google for Using Links
Economists have long warned that a great deal of regulation that is supposedly in the public interest acts in practice as a transfer of wealth from one private interest to another. Policy makers are usually demure enough to hide this. It is rare that rent-seeking is as explicit and open as the Australian government’s current attempt to expropriate money from Facebook and Google—money that will be directly paid to the traditional news outlets that these tech companies have disrupted.
This is much more than just a regional policy fight; what is happening in Australia tells us a lot about how the changing economics of media are feeding the bipartisan war on the tech industry in the United States and globally. Much of what is dressed up as populist anti-tech policy is in fact an attempt by legacy media companies to weaponize confused regulators against their competitors.
The Australian government wants Facebook and Google to sign onto what they call a “News Media Bargaining Code,” which will require tech companies to pay news organizations when news content is “included” on the digital platforms. The exact price to be paid is meant to be negotiated by media companies and digital platforms. The rationale offered by Australian antitrust regulators is that there is a “bargaining power imbalance” between tech and media companies, hence the need for government action to get negotiations started.
You may be tempted to read that paragraph again. Don’t bother. The government’s argument is euphemistic and its reasoning is obscure. The most obvious problem is that neither Facebook nor Google “include” news content on their platform. The dispute is not about intellectual property theft; all tech companies are doing is linking to news sites. Facebook allows users to share links. Google offers links through its general search function as well as its Google News search service. The upshot is that the Australian government wants Facebook and Google to pay news organizations for the privilege of linking to their content.
Unsurprisingly, Facebook has said if it is forced to pay it will simply block Australians from
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