Saving Journalism from Big Tech
By mandating that digital platforms pay news publishers for the content that appears on their sites, Australia has helped to advance the global debate about tech regulation and the plight of independent media. But the Australian model has three limitations, indicating that an even more ambitious solution is needed.
MONTREAL – It is easy to forget that for a long time – long before Google and Facebook went head-to-head with the Australian government last month – there wasn’t a proven business model for the internet. That, after all, is why the dot-com bubble popped. But then Google and Facebook found a way to transform their biggest asset, user data, into a lucrative product: advertising that targets consumers with far more nuance and precision than traditional TV or print ads ever could.
Much can be said about this type of micro-targeted advertising, its impact on society, and whether it should even be allowed. But one thing is clear: it has been wildly successful in commercial terms. Having captured almost all of the advertising revenue in the market, Google and Facebook are now two of the most profitable companies in history, so powerful that they can strong-arm many national governments.
Because Google and Facebook have gained monopoly-like dominance over digital advertising in search and social networking, respectively, it is now next to impossible to bargain with them. Worse, a business model that is not based on the distribution of reliable information has come at the expense of reputable journalistic institutions and others in the business of providing this crucial public good. We are thus left with a dual market failure that harms not only the advertising business, but also democracy.