Rupert Murdoch

For many decades Australian media policy has been based on a core principle: the federal government looks after the incumbents.

In particular it protected them from the threat of competition. And at the very top of the food chain were the free-to-air commercial networks, more powerful even than News Corp, because they controlled the 6pm news bulletins that shaped the images voters saw during election campaigns.

Even the Murdochs took second place in 1990s and 2000s when Foxtel was hemmed in by anti-competitive regulation to prevent it from posing a threat to the free-to-airs.

Then high-speed internet — or at least the slower version of it Malcolm Turnbull allowed us to have — arrived. Australians could access content when they wanted and how they wanted, increasingly unencumbered by the arrogance of the major media companies which had long taken the view they would get what they were given, when they were given it, and they’d shut up and like it.

The reaction of the incumbents was the same as always — demanding the government protect them from competition by regulating, censoring and taxing online services.

Now Facebook and Google are being targeted for the same treatment at the behest of media companies. Only they’re disinclined to play along.

Facebook’s market capitalisation is US$840 billion, or about 60% of Australia’s falling GDP. Alphabet, Google’s parent company, is worth US$1.1 trillion, or about 80%.

Both have become dominant not merely through innovation but through anti-competitive behaviour. But unlike Australian media companies they haven’t appealed to governments to stop competitors. They’ve simply bought them.

The US companies are far, far bigger, and far uglier, than Australia’s media oligopolists, which could be bought and sold by Facebook and Google for less than the value of a daily share price movement. And they originate from an environment that prefers to ignore regulation and licensing rather than exploit it.

Facebook’s warning yesterday that it would stop sharing news links for Australians predictably prompted a round of hostile articles from the media outlets trying to engineer what would be, if it was successful, a multibillion-dollar heist by legislative fiat.

One, by Stephen Bartholomeusz, stood out as representative of the stupidity of the debate. It was, he claimed, “inarguable to anyone familiar with what has happened to the news media in the past several decades that the platforms — along with other online advertising vehicles — have sucked enormous and destabilising revenue and value away from traditional media”.

Except who owns those “other advertising platforms”? Who owns most of the digital real estate platform REA group, which is substantially bigger than News Corp? News Corp does. Who owns 60% of the real estate platform Domain, which is nearly as big as Nine Media? Nine Media.

Those companies have cannibalised their own real estate ad revenue to the point where their real estate arms are as big, or bigger, than the traditional media arm and they’ve been spun off into separate listings.

The other rich sources of newspaper revenue — car sales and job ads — have flowed to and Seek, with whom News Corp has a joint venture.

“There won’t be much news for Google or Facebook to publish or link to if the publishers don’t survive,” Bartholomeusz says, laying bare the real agenda.

This is not about paying for news content, or even about some sort of recompense for successfully undermining the business models of media incumbents. It’s about propping up the uncompetitive detritus of a failing industry.

What kind of company could tell its shareholders it had committed to endlessly keeping companies in another industry on life support?

For a government used to regulating media like a club in which the interests of the members are the only consideration, it’s a rude shock to encounter companies that have no interest in playing by the traditional rules.

It has no alternative but to double down on its plan to steal from Facebook and Google. If it gives in, it will face the wrath of local media outlets that, even in their death throes, can still hurt politicians.