How Australia Has Missed the Forest for the Trees with the New Media Laws

Last Wednesday, in response to the Australian Parliament passing the News Media Bargaining Code, Facebook decided it wanted out. Rather than being subjected to the Australian Government’s new laws, it was going to stop users in Australia posting links to any news.

The legislation that led to this was a long time coming: the Australian Competition and Consumer Commission began the process of investigation back in 2020. The reaction to Facebook, however, was swift:

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It’s an easy story to buy. Zuckerberg the arrogant, out-of-touch tech CEO, censoring the continent of… Australia! Lord knows, it fits the narrative — Facebook has done more than enough in the past for this to be a reasonable conclusion to reach.

Zuckerberg’s timing is always exquisite; with this, it was no different. Pulling the plug on news days before Australia’s vaccine rollout was scheduled to begin was always going to generate massive amounts of heat.

But today, a curious thing happened. The Australian Government announced amendments to the law, designed to bring Facebook back to the country. Facebook, in a statement:

Going forward, the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation.

Given this whole exercise has been framed as tech giants haven taking advantage of news publishers… wasn’t Facebook pulling out of news a good outcome? No more exploitation! And similarly, why would Facebook want to retain the ability to pull the news again?

Turns out, the story about the tech giants “taking advantage of the media” is not exactly true. In fact, if anything, it’s the opposite.

Quite how this has become gospel throughout Australia is revealing in how much Australia is completely focused on the wrong thing in regards to the new media laws.

At almost the exact same time as Facebook was dominating the media with its decision to pull news from its platform in Australia, the former Prime Minister of Australia, Kevin Rudd, was fronting a parliamentary inquiry as to the influence of Rupert Murdoch in Australia. An petition to the Government that garnered more than 500,000 signatures — the most ever of any such petition, in a country of 25 million — called for a Royal Commission people know that “something was crook”.

This is what he had to say.

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That’s a pretty serious charge from the former democratically elected leader of a political party.

Given this, how do you think Australia’s newspapers — the fourth estate, those that are charged to hold truth to power — handled it the next day?

Probably not like this, right?

As tweeted by Kevin Rudd

Rudd was carpet bombed.

But then again, Kevin Rudd was former leader of the Australia Labor Party, a centre-left political party. You might think that this is exactly what a centre-left politician would have to say about the Murdoch press. What it doesn’t explain is why Malcolm Turnbull, another former Prime Minister — this time of the Liberal Party, the centre-right party of Australia, had this to say about Murdoch on Australian TV (with the editor of a Murdoch newspaper present):

“The reality is, News Corp and Murdoch have done enormous damage to Western democracy, and in particular to the United States and to Australia.” (1:06 at the below video… but I highly encourage you to watch the whole thing).

You know what Kevin Rudd and Malcolm Turnbull both have in common? They’re both former Prime Ministers. Ex-politicians. It’s only when they’re not seeking to be elected, that they’re free from Murdoch’s bully pulpit.

No current politician is able to speak their mind about Rupert Murdoch and his influence in Australia, because if they did, they would have the weight of the Murdoch empire crash down on top of them.

But, if anything, this understates the problem.

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So well established is the political quid pro quo that Australian politicians not only know to not criticize Murdoch, they know to give him what he wants. Use his talking points. Cross Murdoch and you’re sunk. Align with him and his editors on a topic, and a politician can surf the wave of a zeitgeist all the way in to shore.

While the Murdoch empire and the politicians are in lockstep, at least usually in Australia, there is at least some part of the media left that’s not under his finger that is left to rebel and question against his agenda. The problem has been when it comes to the topic of the Media Bargaining legislation, even that’s not there. With media companies smelling Google and Facebook dollars in the water, and journalists already predisposed to (in particular) hating Facebook, the whole gamut of media has lined up behind Murdoch to spin his story.

It’s a sad showing for a proud democracy. In the face of Murdoch’s spin, all critical thinking seems to have collapsed.

It’s not Facebook and Google that killed the media companies. It’s the Internet. Once upon a time, newspapers had geographic distribution monopolies. For example, if you wanted to selling something in a classifieds, or you wanted to advertise to people in a city, you had very few ways to do it. Newspapers were pretty much it.

Craigslist killed it.

Or if you’re an advertiser: why would you run an un-targeted ad in a broadsheet when you could tie your ad to a search query for “car insurance” — which someone is clearly in the market for? Or target an ad for jewelry to an 18–34 college educated woman as she was browsing her Instagram feed, as opposed to blasting every single person who has a newspaper subscription in a city?

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This is what has decimated the news business — in the modern era, their non-subscription business lines, well… suck!

But the problem is: to even have mount this argument is buying way too far into Murdoch’s spin. Newspapers weren’t created with some god-granted monopoly on advertising. Why are we pretending that they did?

Yes. They had it. And now? It’s gone.

And this leads to the broader point. Yeah, newspapers have it rough. But exactly what industry hasn’t been disrupted by the internet? It’s certainly far from just journalism. From taxis to online commerce, the Internet has transformed our world. And no doubt, there’s been a massive change that society has experienced as a result.

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Given there are winners and there are losers, well, taxation seems like a reasonable approach. And you know what? There is actually a great deal of merit to the idea of taxing the tech giants. Whether you view it from the lens “these products are addictive and we tax addictive products like cigarettes on the basis of the externalities”, or you view it from “let’s tax the social media companies because they’re too big”, or even “why don’t we tax online ads?!”, there is actually a lot of merit to creating a tax here.

But one of the usual advantages of a tax in Australia is that, well, Australian taxpayers benefit. That money would head into the Australia Treasury. The Australian Government can do what it was elected to do: figure how to redistributed that money to offset the dislocation that the Internet has had on society more broadly.

And yet, that is not what is happening with this legislation. Instead, we are targeting the two preeminent tech platforms with what amounts to an effective tax, and handing it to just one industry.

And let’s be honest here, it’s not even handing it to one industry. It’s predominantly handing it to one company.

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You’ve probably heard that the legislation has all been done under the guise of creating a “fair negotiating environment” for the journalism industry in Australia. The huge tech giants are far too concentrated in their power — they’ll just beat up the little old newspaper industry in Australia.

Well, about that.

The Government and the ACCC seem to keep forgetting that Murdoch has a vice-like grip on media in Australia. To properly understand how ridiculous this “even-the-playing-field” argument is, you need some sense of how concentrated media ownership is in Australia. In 2016, a landmark study on media ownership and concentration was published. Entitled “Who Owns the World’s Media?”, it found that Australia had the third worst score for newspaper ownership concentration in the world.

Not a bad podium finish.

China. Egypt. Australia.

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Russia — f*@$ing Russia!!— has a more diversified ownership of newspapers.

This isn’t “evening the playing field”. This is a game of pick your preferred monopolist and help him out. If you’re a politician hoping to get re-elected, guess which one you’re going to pick?

Part of what I find so distressing about what the legislation that Australia has created: it effectively and indefinitely subsidizes not journalism that is good for society, but rather, disinformation that is corrosive to democracies — and the planet.

This article by Ketan Joshi does an incredible job of tracing back the lineage of just one piece of disinformation that Murdoch is responsible for. You might have seen the terrible Austin blackouts — and the (untrue) claim that renewables were responsible (when it was mostly fossil fuels). Well, a similar rumor has been spreading about Germany: that the country was without power because solar panels were blanketed in snow and wind turbines frozen. Joshi debunks it, but then endeavors to go back to the source.

So where did it come from? Turns out, via MSN.com, from a republished post tracking back to… you guessed it!

News Corp’s Sky News Australia!

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Turns out, a Sky News commentator had repeated the claims a couple of days earlier, without any evidence. That commentator, former Senator Cory Bernadi, has never been one to let anything remotely resembling a fact get in the way of his opinion.

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Joshi sums the present situation like this:

It is an incredible situation: Google, a company that prides itself on sustainability and climate issues, is about to commence paying money to News Corp in exchange for packages of misinformation, denialism, hate, bigotry and fabricated news items. Sky News Australia misinformation — such as made up story about Germany’s grid — already appears prominently in Google News results for renewable energy.

That’s what Australia has just done.

Within 24 hours of the legislation passing, Google had been sufficiently cowed that it created a global agreement with News Corp.

News Corp crowed. This is what went up on their website:

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If you’re a bureaucrat or a politician, and you ever wonder: “man, have I been subject to regulatory capture?” Well, here’s a hint. If a press release shouts you out by name, it’s probably a pretty good sign you’re in deeper than you should be.

The problem, of course, is for the rest of us. The ones that still believe in democracy.

What has happened in Australia has been to legislate ongoing fiscal support for one of the world’s pre-eminent sources of disinformation. It’s been done under the guise of “protecting democracy through journalism”. The truth of the matter is the opposite. It has locked-in place the one company that perhaps more than any other has corroded the foundation of democracies all around the world.

Facebook — of all companies!! — stood their ground. Watching the Australian Government go back, hat in hand to them — and ready to make amendments that allow Facebook to walk away from the industry that they’ve been “taking advantage of” for so long, reveal the farcical nature of the whole affair.

And I say that as a Facebook critic with a long track record. While it’s dealt with this incredibly poorly, the reaction to this issue has done us an incredible service: it’s demonstrated to us just how much power Murdoch has, and just how fragile our democracy is as a result.

Sadder still, it looks like Australia has been patient zero in the 2021's Murdoch pandemic. Canada is now promising to copy these laws. Europe is making similar noises too. And in what might go down as the most craven move of a tech company, ever, Microsoft — smelling the opportunity to get a competitor regulated — is egging them on.

So what is there to be done? It’s actually surprisingly simple.

Big tech is a problem. The power of those companies that have been called in front of Congress is real. The consequences of that power is only going to increase. We need to deal with it.

Similarly, the dislocation caused by the Internet — including to journalism — is a problem. It is one that is only going to get worse as tech penetrates every part of our lives. We also need to deal with this, too.

But these issues are two separate issues. We need to stop conflating them. These are hellishly tricky problems to solve. They’ll be hard enough to solve if the framing is set up right for each. Collapsing them into one problem will not help. They have different causes, and require distinct solutions.

There is one last thing, compounding all of this further. There is one very powerful man — one who courts Presidents and Prime Ministers, whose own papers boast about its ability to swing elections.

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It is his interest to make you think that these two issues are the same issue. Even though they are not. Remember that first image from this post?

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If there is one takeaway from the Parliamentary Inquiry that Australia has just held — all while the Australian Government was still doing Murdoch’s bidding with regards to the tech companies — it is this:

If you believe in democracy, Rupert Murdoch’s interests are not aligned with your interests.

If you enjoyed this article, you might enjoy the Exponent, the podcast I co-host with Ben Thompson. We talked about this topic on Episode 192. I’d also love for you to subscribe to my free newsletter here — I’ll email you (very occasionally!) when there’s a new post. And, finally, hitting the 👏 button below would be much appreciated so other folks on Medium will see the post, too.

Co-host @exponentFM, Co-author @MeasureYourLife, Fellow @ClayChristensen's thinktank, writer @HarvardBiz

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