Australia vs GAFAM: A fight the whole world is watching

Australia vs GAFAM: A fight the whole world is watching

Australia has become an international battleground in recent months, with news publishers and media fighting valiantly against the web giants. At the heart of the combat is respect for media copyright and an effort to stop advertising revenue from being funnelled towards GAFAM (Google, Amazon, Facebook, Apple and Microsoft).

On February 25, 2021, the Australian government took a bold stand by adopting legislation that requires the web giants to negotiate fair compensation for news publishers and other media. In addition to ensuring compensation for Australian media, the government has chipped away at the dominant position enjoyed by GAFAM all over the world.

New legislation, new power balance

While various countries are considering taxes on revenues or voluntary partnerships to stimulate local investment by the U.S. giants, Australia is seeking to change the actual rules of the game. Their end game is to provide fair compensation to media organizations by forcing GAFAM to negotiate one on one.

The Australian government is going ahead with a true readjustment of the power balance. The web giants will now have to negotiate with media companies. If the negotiations fail, an arbitrator will make the final decision.

Local media organizations now have tools to collectively negotiate fair compensation for the use of their related rights (or neighbouring rights) and other forms of copyright.

Many countries, including Canada, have been inspired by Australia’s approach. That’s a major concern for some very powerful corporate owners, such as Facebook’s Mark Zuckerberg.

Failed counterattack by Google and Facebook

The two Silicon Valley giants quickly readied their arsenals. Google threatened to cut off access to news items on its search engine. The threat had to be taken seriously, given that the U.S. company used the same tactic with media organizations in Spain in 2014.

For its part, Facebook acted on its threats. In Australia on February 18, media publications from all over the world were blocked from appearing on social media. That action proved only to be temporary. Alone on the battlefield, Facebook retreated on February 26.

The reason that Google didn’t use its arms and Facebook backtracked was that Australia had support from another GAFAM.

Microsoft in favour of related rights

According to Microsoft president Brad Smith, public support in favour of the Australian legislation made Google pull back. “Within 24 hours [after Microsoft took a stand], Google was on the phone with the Prime Minister, saying they didn’t really want to leave the country after all,” Smith explained on the Microsoft blog.

Spillover in Canada

Like a number of other countries, Canada would like to follow Australia’s example. Canadian Heritage minister Steven Guilbeault called Facebook’s behaviour “highly irresponsible.” According to Agence QMI, the federal government would like to support Australia quickly by tabling its own draft legislation.

$620 million

That’s the amount Canadian media organizations could earn under legislation similar to Australia’s, as calculated in the report Levelling the Digital Playing Field released by News Media Canada, which represents over 800 news publishers across the country.

First battle

What’s next? The Australian legislation will be put to the test. GAFAM and Australian media organizations will now have to negotiate. Other attacks can be expected from Google and Facebook, which are fiercely determined to maintain their advertising revenue streams and are worried that allied governments will join the fray.

Will the Canadian government keep its word and enter the fight alongside Australia? Or will it remain on the sidelines until it introduces its own legislation?