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A shock ran through Australian politics this week when tech giant Google flexed the muscle of its platforms against the threat of mandated payments to old media companies, News Corp and Nine, through an open letter to its 20 million Australian users.

Australia’s political and media elite seemed nonplussed: can they really do that?

It seemed almost unAustralian. At least when old media companies like News Corp use their platforms to promote their interests, they have the decency to dress it up as “news”.

Or when fossil-fuel companies want to resist climate action they wash their campaign through respectable front groups. (Hello, IPA!)

But when, like Google, you have your own channel used by most Australians most days, what else would you do? In its letter Google said the government proposals would dramatically worsen internet services in Australia and could lead to users’ personal data being handed over to media companies:

The law would force us to give an unfair advantage to one group of businesses — news media businesses — over everyone else who has a website, YouTube channel or small business. The proposed changes are not fair and they mean that Google search results and YouTube will be worse for you.

They encouraged YouTube creators to protest the draft legislation up for consultation until August 28 through the Australian Competition and Consumer Commission and foreshadowed further action in coming days. The ACCC responded that the letter was based on “misinformation”.

It’s a first for Australia, but it’s part of a global pattern by the big tech companies to resist regulation — particularly regulation that costs money or challenges their monopoly.

It’s a playbook that includes spending big on lobbying, removing services from countries or states to avoid regulation (and punish regulators), leveraging their user networks to campaign politically and, if necessary, unleashing the lawyers.

Most famously, in 2014, Google shut down Google News in Spain when faced with a law requiring it to pay publishers for using snippets in the News search results.

Both platforms are heavily represented in Canberra. According to Australia’s lobbyist register, Facebook is represented by DPG Advisory Solutions, whose principal, David Gazard, was described in the AFR in 2018 as “number one in terms of who Morrison speaks to”. Google has multiple representatives, including Newgate Communications and TG Endeavour, that claim close connections with the Nationals.

Still they’d be finding it hard to compete with the Murdochs’ News Corp or the Peter Costello-chaired Nine.

Just how far big tech will go to protect revenues has shown up this week in the industry’s home state of California. The two big app-based transport companies, Uber and Lyft, are threatening to suspend operations in the state rather than comply with a law requiring them to treat their drivers as employees (with consequent minimum wages and benefits) rather than independent contractors.

They spent US$100 million boosting a referendum to be voted on in November to overturn the law. Their yes case is being supported through emails to customers and in-app promotions as well as a multimillion-dollar public advertising campaign.

Now, facing a court order to comply with the law this month, Uber and Lyft have threatened to suspend their services in California until their ballot proposal is approved.

The Australian government believes its draft legislation will prevent the tech platforms from suspending or limiting services. However, Facebook has foreshadowed that it doesn’t believe it needs news, saying: “News content is highly substitutable with other content for our users and … does not drive significant long-term commercial value for our business.”

Google says it doesn’t sell ads against news searches and has consistently said it believes its search delivers more value to publishers through subscriptions and advertising than it takes through using news snippets in its results.

Both companies have been attempting to make friends in the news world through grants and training both to start-up media and traditional voices.

The tech platforms have not threatened legal action against the code, but it can’t be ruled out. Last year an internal leak showed Facebook’s chief executive Mark Zuckerberg threatening legal action against any threatened break-up of the company by US regulators.

“I would bet that we will win the legal challenge,” he pugnaciously told staff.

Peter Fray

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