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Out With the Old, In With The New(s)? Not for Facebook Australia
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<blockquote data-quote="Dheepa" data-source="post: 67430" data-attributes="member: 1572"><p>Hi guys, so to kick off my end of the discussion, I think it’ll be important to clarify what is and isn’t new about the Australian law mentioned in the article. This will help put into context why I think we’re likely to see a similar rollout of legislation across the EU and potentially the UK.</p><p></p><p><strong>Background</strong></p><p></p><p>Big Tech has shaken up the publishing and news industry in two ways:</p><ul> <li data-xf-list-type="ul">The free sharing of content and news across platforms has meant that many traditional news outlets no longer see a demand for their content.</li> <li data-xf-list-type="ul">Even when news groups shifted to embrace online publishing, they struggled to generate ad revenue that would keep them going.</li> </ul><p>All this led to publishers lobbying (for the better part of the last decade) for rights to any of their content being linked to on Big Tech platforms to be better protected.</p><p></p><p>Striking a balance between news groups and Big Tech is something that governments have already tried and it’s not like Big Tech has been oblivious to the pressure. Art 17 of the EU Copyright Directive (as Jacob discussed) allowed publishers to start charging Big Tech for snippets of articles that are published on platforms. Later that year, Facebook announced that it would enter into commercial agreements with around 40 US publishers to publish their content in its “News” Tab.</p><p></p><p>The novel aspect of the Australian law is mainly the arbitration rule that it has introduced. The rule allows the government to appoint an independent arbitrator that can set a mandatory rate tech companies pay to publishers for their content, should prior negotiations between the two parties fail.</p><p></p><p>So if I were discussing this an interview, what kind of issues would I be looking into?</p><p></p><p><strong>Role of Big Tech – is this really regulating/curbing their influence or increasing it?</strong></p><p></p><p>In my opinion, this law has given platforms like Facebook more control over the information it chooses to let people see. An amendment to the initial law states that if BigTech have made a “significant contribution” to the news industry in Australia then less scrutiny will apply. This allows platforms to have free reign over which news outlets to enter into agreements with, what kind of perspectives are represented and which news groups get cut out from benefiting entirely. In light of all the problems Facebook has had with <a href="https://www.ft.com/content/6ba97e63-af02-4239-b6cc-95332a21b3fb" target="_blank">controlling misinformation, and hate speech</a>, I personally think it’s going to create huge political issues (like we saw in the US this past summer) down the line.</p><p></p><p><strong>Increasing pressure on BigTech</strong></p><p></p><p>In response to the Australian law, <a href="https://about.fb.com/news/2021/02/the-real-story-of-what-happened-with-news-on-facebook-in-australia/" target="_blank">Nick Clegg explained</a> that he believed the law to be based on a fundamental misunderstanding of Facebook’s business model. He argued that Facebook barely generated revenue from news and that sharing profits from ad revenues didn’t make sense. Facebook’s news blackout (what the Australian PM sees as <a href="https://www.bbc.com/news/world-australia-56109036" target="_blank">intimidation tactics</a>) is only going to make life for all Big Tech companies harder. The 449-page report released by House of Representatives in October of last year summarised the concerns of US lawmakers after the Big Tech anti-trust hearings in the summer. Combined with the new Democratic government in the US, Facebook’s actions will likely <a href="https://www.ft.com/content/4be47818-e889-4442-a009-1d1adda25b0d" target="_blank">increase momentum on antitrust regulations</a>. Under the proposed Digital Services Act, the EU is already considering requiring Big Tech platforms to share data, so why not share ad revenues? Importantly, the EU is also considering <a href="https://www.ft.com/content/4c40c890-afd3-40a3-9582-78a66c37a8af" target="_blank">following Australia’s lead</a> on this point by including a similar model in the aforementioned Act. While I think it is worth questioning if those profits should be shared with news companies who arguably are just as much to blame for their own situation (due to their slow transition online), it is especially unlikely after the blackout that law makers will be sympathetic in any way to Big Tech.</p><p></p><p><strong>Relevance to law firms</strong></p><p></p><p>As Jacob has pointed out, the UK is keen to remain a hotspot for tech players and is really looking to differentiate itself from parts of the EU regime. In terms of broad trends to keep an eye out for, these are my thoughts:</p><p></p><p>1. The fact that Google’s deal with News Group was a global one that includes UK newspapers (specifically The Times and the Sun) leads me to believe that it is possible that local news outlets will lobby for similar legislation from the government to ensure that they are not cut out of this potentially business saving source of revenue as well. Google spent $22m on content from an average of 100 publishers in France while an agreement with one news group in Australia alone (Seven West Media) is said to be between $7.7m to $23m (FT). Now that Facebook has removed its ban on news content in Australia, it is likely that high market prices for news content will continue. With these deals now straying into far more profitable regions, this is potentially going to be a great source of revenue for law firms.</p><p></p><p>2. The UK is already implementing a special digital unit to tackle Big Tech competition issues. This is in addition to the already enforced digital services tax. It has also recently introduced the online harms bill that creates a new duty of care towards users. Big Tech platforms will also be required to create an appeal system for any content removed. Governments' around the world seem to be taking a piecemeal approach to Big Tech regulation in general. Everything we’ve seen so far has been reactionary and as more policies and regulations outside the traditional bounds of data privacy, tax and competition issues develop, it is highly likely that law firms will need to develop specialised tech regulation teams (similar to the recent increase in specialist environment and ESG teams) to deal with the myriad of legislation coming.</p></blockquote><p></p>
[QUOTE="Dheepa, post: 67430, member: 1572"] Hi guys, so to kick off my end of the discussion, I think it’ll be important to clarify what is and isn’t new about the Australian law mentioned in the article. This will help put into context why I think we’re likely to see a similar rollout of legislation across the EU and potentially the UK. [B]Background[/B] Big Tech has shaken up the publishing and news industry in two ways: [LIST] [*]The free sharing of content and news across platforms has meant that many traditional news outlets no longer see a demand for their content. [*]Even when news groups shifted to embrace online publishing, they struggled to generate ad revenue that would keep them going. [/LIST] All this led to publishers lobbying (for the better part of the last decade) for rights to any of their content being linked to on Big Tech platforms to be better protected. Striking a balance between news groups and Big Tech is something that governments have already tried and it’s not like Big Tech has been oblivious to the pressure. Art 17 of the EU Copyright Directive (as Jacob discussed) allowed publishers to start charging Big Tech for snippets of articles that are published on platforms. Later that year, Facebook announced that it would enter into commercial agreements with around 40 US publishers to publish their content in its “News” Tab. The novel aspect of the Australian law is mainly the arbitration rule that it has introduced. The rule allows the government to appoint an independent arbitrator that can set a mandatory rate tech companies pay to publishers for their content, should prior negotiations between the two parties fail. So if I were discussing this an interview, what kind of issues would I be looking into? [B]Role of Big Tech – is this really regulating/curbing their influence or increasing it?[/B] In my opinion, this law has given platforms like Facebook more control over the information it chooses to let people see. An amendment to the initial law states that if BigTech have made a “significant contribution” to the news industry in Australia then less scrutiny will apply. This allows platforms to have free reign over which news outlets to enter into agreements with, what kind of perspectives are represented and which news groups get cut out from benefiting entirely. In light of all the problems Facebook has had with [URL='https://www.ft.com/content/6ba97e63-af02-4239-b6cc-95332a21b3fb']controlling misinformation, and hate speech[/URL], I personally think it’s going to create huge political issues (like we saw in the US this past summer) down the line. [B]Increasing pressure on BigTech[/B] In response to the Australian law, [URL='https://about.fb.com/news/2021/02/the-real-story-of-what-happened-with-news-on-facebook-in-australia/']Nick Clegg explained[/URL] that he believed the law to be based on a fundamental misunderstanding of Facebook’s business model. He argued that Facebook barely generated revenue from news and that sharing profits from ad revenues didn’t make sense. Facebook’s news blackout (what the Australian PM sees as [URL='https://www.bbc.com/news/world-australia-56109036']intimidation tactics[/URL]) is only going to make life for all Big Tech companies harder. The 449-page report released by House of Representatives in October of last year summarised the concerns of US lawmakers after the Big Tech anti-trust hearings in the summer. Combined with the new Democratic government in the US, Facebook’s actions will likely [URL='https://www.ft.com/content/4be47818-e889-4442-a009-1d1adda25b0d']increase momentum on antitrust regulations[/URL]. Under the proposed Digital Services Act, the EU is already considering requiring Big Tech platforms to share data, so why not share ad revenues? Importantly, the EU is also considering [URL='https://www.ft.com/content/4c40c890-afd3-40a3-9582-78a66c37a8af']following Australia’s lead[/URL] on this point by including a similar model in the aforementioned Act. While I think it is worth questioning if those profits should be shared with news companies who arguably are just as much to blame for their own situation (due to their slow transition online), it is especially unlikely after the blackout that law makers will be sympathetic in any way to Big Tech. [B]Relevance to law firms[/B] As Jacob has pointed out, the UK is keen to remain a hotspot for tech players and is really looking to differentiate itself from parts of the EU regime. In terms of broad trends to keep an eye out for, these are my thoughts: 1. The fact that Google’s deal with News Group was a global one that includes UK newspapers (specifically The Times and the Sun) leads me to believe that it is possible that local news outlets will lobby for similar legislation from the government to ensure that they are not cut out of this potentially business saving source of revenue as well. Google spent $22m on content from an average of 100 publishers in France while an agreement with one news group in Australia alone (Seven West Media) is said to be between $7.7m to $23m (FT). Now that Facebook has removed its ban on news content in Australia, it is likely that high market prices for news content will continue. With these deals now straying into far more profitable regions, this is potentially going to be a great source of revenue for law firms. 2. The UK is already implementing a special digital unit to tackle Big Tech competition issues. This is in addition to the already enforced digital services tax. It has also recently introduced the online harms bill that creates a new duty of care towards users. Big Tech platforms will also be required to create an appeal system for any content removed. Governments' around the world seem to be taking a piecemeal approach to Big Tech regulation in general. Everything we’ve seen so far has been reactionary and as more policies and regulations outside the traditional bounds of data privacy, tax and competition issues develop, it is highly likely that law firms will need to develop specialised tech regulation teams (similar to the recent increase in specialist environment and ESG teams) to deal with the myriad of legislation coming. [/QUOTE]
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