The Digital Platforms Code: A Pyrrhic Victory


The Digital Platforms Bargaining Code has now become law in its amended form. It has been trumpeted as a magnificent success by the government, news organisations, the ACCC, and many commentators. The morality play has concluded, and the forces of good have triumphed over the forces of evil and we are all, apparently, now living happily ever after.

However, a few hardy souls have checked the fine print and a closer reading of what the final Code actually says indicates that the success is rather much more on the side of the tech platforms. This is largely down to what the various parties consider a ‘win’.

Spinning a Win

Spinning the Code as passed—rather than what it was supposed to be—as a win is clearly in the various parties’ interests, especially if one takes a somewhat cynical view.

The ACCC would obviously prefer to call this a win because it has spent so much time and effort on getting the Code into place. The ACCC can claim, with some justification, to be fair, that the deals with Google and Facebook would not otherwise have happened. This is hard to prove either way, because Google and Facebook already had deals with news organisations of various kinds. Smaller publishers are now likely to be excluded as the platforms deal with those that cover more of the highly concentrated Australian market. The monetary amounts are likely smaller than they would have been with the greater leverage granted by the unamended Code.

But even a partial win is still progress, particularly if this is part of a larger campaign to rein in the tech giants, so it’s disappointing to have the ACCC claim an outsize success rather than partial success on the way to bigger things.

The government obviously wants to call it a win because no politician is going to relish their own defeat, especially not when they have constantly taken an aggressive, we-will-not-be-bullied approach that only magnifies the contrast between promise and outcome. A minor setback becomes a rout when the promise was total, uncompromising victory.

The news organisations want to claim a win because they’ve been championing the Code this whole time. They cast themselves in the role of David against Google/Facebook’s Goliath; the plucky underdogs who triumph against adversity.

And they do indeed get some cash out of the big tech firms. Yet when Facebook gave them exactly what they asked for—stop stealing our content—the reaction wasn’t gleeful celebration but outrage. It only served to highlight how very much the news organisations value Facebook as a channel of distribution, and how little Facebook values them.

For nearly a week, article after article from the news organisations claimed people were missing out on vital information yet I struggled to find a non-journalist who missed seeing news on their Facebook feed, and numerous others I spoke to reported the same dearth of concerned readers. Anecdote is not data, yet it is curious that evidence of reader disquiet, apparently so widespread, was so hard to actually find.

The prevailing mood from readers was, essentially, “meh”.

And finally, both Google and Facebook have successfully avoided more onerous regulation, which they can claim as a win. As I attempted to explain to various people in the past few weeks, Google and Facebook had multiple ways to win here, the hallmark of any good negotiator, and some of those wins were merely “don’t lose”.

Google has ring-fenced the news into a small corner of its platform, and protected its crown jewels: Search. Its deals expire in a few years, during which time it can study how news works in the petri dish it has created, with the gleeful participation of the news organisations it will experiment on. Facebook, meanwhile, will run a lab of its own to figure out if having news on its platform is worth the hassle.

Neither company will be designated by the Minister because they’ll throw a handful of cash and a chunk of their own advertising credits at a few large media companies to ensure the Code remains inactive. If the situation changes, they will get plenty of advance notice with which to lobby, or, especially in the case of Facebook, simply remove all news again, which may be Facebook’s ultimate goal anyway.

Google and Facebook Are Different

There is an important aspect that has been missed by most commentators when talking about the Code: Google and Facebook are fundamentally different.

Google dominates in search, and in context-based ads. It is most closely analogous to a company that sells directories and billboards. When you want to find something, instead of turning to the Yellow Pages, or the Melways, you search in Google. When you decide on where to go, Google will show you ads on your way there, and sometimes at the venue itself.

But Facebook is the venue. It is a destination in and of itself. Its goal is to stop you from leaving, but if you do, to keep you coming back. Facebook can do this because of the inherent social nature of humans. People go to Facebook because that’s where everyone else is. Leaving Facebook is hard in the same way picking a lunch venue is hard: you have to get other people to all agree where to go. The more people you have to convince, the harder it gets to keep everyone happy. So you go where you always go, and stay where you’ve always stayed.

Leaving Facebook is like trying to convince all your family and friends to move to a small country town, or reconciling yourself to rarely seeing them any more.

Google dominates the liminal spaces between everywhere else, while Facebook dominates as the place you can’t help but be because that’s where everyone else is. This fundamentally shapes the relationship they have with news organisations.

For Google Search, news organisations are just another set of companies with something to sell that need to attract people’s attention, which they do by selling ads. Google acts as a traffic director for the audience, clipping the ticket in multiple places when readers seek out news. But this is the critical point: the readers are seeking news, not power drills or shampoo or gift baskets of fruit. Google can choose which news company gets the audience based on what sort of news they’re after, but it can’t send someone looking for today’s news to Tony and Danielle’s Luxury Shoe Emporium.

Facebook, by contrast, doesn’t much care what you’re reading or doing so long as you’re doing it on Facebook where they can show you more ads. Arguing with your friends about which Star Wars character has the best toenails is just as useful for Facebook as arguing with racist uncles about the latest screed from Incitement Digest, though the racist screeds apparently sell more ads.

Facebook wants to show you everything you might ever need so you never leave, while Google wants you to trust that it will always be able to find what you’re looking for so why look anywhere else?

For both companies, news is just a small part of what they care about because news is just a small part of what every human on Earth who isn’t a journalist cares about. There is just so much other stuff that isn’t news, and neither Facebook nor Google are in the news business.

Differently The Same

Both Google and Facebook have been accused of unfairly, and illegally, abusing their market power to crush competitors and further entrench themselves as the only viable choice. A key goal of the Code was to use the government to counter this market power in a way that the news companies had been unable to in the regular market. Their bargaining positions were too weak, for reasons I discussed when I last wrote about the Code.

Yet instead of tackling the power imbalance in the market, the concessions granted by the government fundamentally undermined this goal. The tech giants can now negotiate with who they choose to, and offer them different terms. Facebook can pay less money to News Corp in exchange for giving Sky News greater prominence than articles from the ABC. Google can give Nine and SBS a few ad credits to spend at their leisure and ignore regional publishers completely while it continues letting white supremacists monetise their rants with ads on YouTube.

Both platforms have kept the power that they most care about and conceded ground in areas that aren’t that important to their overall business. They’ve further entrenched themselves as somehow vital to the future existence of news, a position championed by their opponents in response to Facebook turning off pages for the Bureau of Meteorology and North Shore Mums. It’s one of the more breathtaking own-goals I’ve ever witnessed.

Next Move

It’s possible that the Code is just one of several moves the ACCC has planned to tackle the power of the tech companies that are out of favour with the public at the moment.

But the Code does nothing to alter the power imbalance by itself. In fact, it has created new incentives for news organisations to align themselves with the business model of the tech companies: surveilling their users and monetising the data. News organisations are just more bait in the trap, though getting paid directly might make them feel better about the giant CHEESE label on their clothes.

We should soon know if the Australian government really does plan to tackle the tech companies’ power or not. The Privacy Act is currently under review, and there is a chance to curtail the ability of Google and Facebook to track our every move. This data sits at the core of Google and Facebook’s power. If the government is serious about curtailing that power, statutory privacy rights to stop the industrial-scale data colonisation project in its tracks would be a clear signal.

I am not hopeful. The ever-increasing surveillance powers handed to authorities give them every incentive to encourage tech giants to collect more data on us that the government can then force them to hand over. The proposed Data Availability and Transparency Act will bypass existing privacy protections and let government agencies ‘share’ data about us among themselves like never before, and potentially with the private sector. The existing My Health Record system enables data sharing for research purposes by default.

Bookmark the permalink.

Comments are closed.