The proposed News Media and Bargaining Code has caused quite a stir, with Facebook and Google threatening to cease offering parts of their services to Australian customers should the bill be passed.

Such protests are unsurprising. After all, it’s their bottom lines that are at stake. Rather than fretting about whether or not we’ll be able to quickly look up who that familiar-looking actor in the movie is (we will), we should take the time to reflect on the issues the debate has brought to light.

The proposed Code would see Google and Facebook pay Australian news providers for hosting links to news content, and is designed to address an “imbalance in bargaining power” in how media organisations deal with these two digital giants, as the Australian Competition and Consumer Commission (ACCC) found that the sites held a near-duopoly over Australian internet traffic. Google has in part seized upon concerns raised by Sir Tim Berners-Lee, creator of the World Wide Web, and Vint Cerf who co-created the communications protocol that built the modern Internet and is now a Vice-President and ‘Internet Evangelist’ at Google.

In both men’s submissions to the Senate Committee the main concern is that paying for links undermines the most basic principle of the Web, that linking between sites should be ‘free and open’. An open letter published by Google Australia Managing Director Mel Silva echoes these concerns, claiming that paying for news links would ultimately break Google Search, as it relies on the principle of free links.

Facebook also objected to the proposed bill on the grounds that news organisations and publishers already benefit from using Facebook’s platform. In a blog post Will Easton, Managing Director for Facebook Australia and New Zealand, claimed that over the course of 2020 “[Facebook] sent over 4.7 billion clicks from News Feed to Australian news websites…worth an estimated A$394 million”.

At the core of all this are two issues. The first relates to Google and Facebook’s business models and their roles in the distribution of news, while the second concerns the current nature of the internet itself, whether it is truly free and open.

Far from being the first to do so, the ACCC Digital Platforms Inquiry reported that although Facebook and Google offer their services to customers for free, that is not the main objective for either company. Rather, they build and sell datasets about their audiences to advertisers, who in turn create targeted advertisements. These are then displayed on third-party websites in advertising spaces which, conveniently enough, are often owned by Facebook or Google.

These business models are immensely profitable, with Australian-generated income for the two companies being an estimated $7 billion. Thanks to some clever accounting a majority of this goes untaxed, although for the purpose of this piece this is beside the point. What is important is that one way or another the companies are profiting from links to news content, either by directing traffic to news websites through their data-harvesting operations or from their advertising duopoly which accounts for around 80 per cent of Australia’s digital ad spend.

Not only do the companies divert money into their own coffers in this way, but it is possible to argue that through their media-rich previews the two companies actually dis-incentivise users from following links to news sites. Thanks to these previews, which often include summaries of the news content being linked to, people may decide not to click links they may have initially considered following and thus remain within the confines of Facebook or Google. It is not simply, as Google claim, a matter of providing links to content.

Content published to these sites is also subject to the whims of both the algorithm and those in charge. Per the Wall Street Journal, Google routinely moderates the results displayed on its search page, tweaking the algorithm to favour or suppress certain content, as happened to Australian news sites last week. In his submission to the Senate Committee, Cerf claimed that the proposed Australian legislation would “introduce bias into systems that were designed to be fair” and that it would “undercut a democratic Internet”. The irony of writing such statements on Google letterhead, as Cerf did, cannot be understated.

Such problems are not limited to Google. Facebook also curates the content appearing in its News Feed via an algorithm. Previous changes to this algorithm have diverted users’ attention away from news organisations and continues to favour more ‘divisive’ content, with executives stymieing attempts to rectify this, as reported in the Wall Street Journal.

In this context, the Code makes sense. If Facebook and Google are abusing their market position and profiting by diverting advertising money and traffic away from news organisations, using the organisations’ own content no less, then they should be subject to regulation.

Considering Berners-Lee and Cerf’s concerns, if the proposed bill would undermine the free, open and democratic principle of the Internet, what should we make of Google and Facebook’s practices?

As programmer Andre Staltz details, Google and Facebook receive a majority of internet traffic globally, which is corroborated by Google themselves who claim to serve over 19 million Australians or around 70 per cent of the population. Likewise, the ACCC reported that Facebook and Google account for nearly 50 per cent of the time Australians spend on the internet, both vastly outstripping any other individual company.

What this means is that for a lot of people a vast proportion, if not all, of their interactions with the internet occur within the confines of Facebook and Google’s ecosystem. Free and open? Not really. Democratic? Not in the slightest.

Although forfeiting our data makes accessing these services free from a monetary perspective, the fact is Facebook and Google are ultimately able to use their power to determine who gets shown what content, or whether content is shown at all. While the companies may take a liberal approach to allowing some content, such a situation could hardly be described as ‘open’. Staltz also argues that Google can hardly claim to be a proponent of the ‘open’ web as it routinely substitutes open standards and protocols for proprietary ones as a means of ‘locking in’ its customers and using its vast infrastructure to prevent competition.

As for the democratic aspect, Cerf implies that in its current form, people on the internet “compete on the value of their content and the merit of their opinions”. Crucially, this statement ignores the fact that the ‘value’ of such content is ultimately determined by the companies and their respective algorithms, not the wider public.

What Facebook and Google value is continued engagement with their platforms and continued growth in advertising revenue and not the open and free distribution of content. Nothing demonstrates this better than the recent Facebook Blog post, which implies that paying Australian news organisations would seriously damage Facebook’s income. Global revenue and net income for 2019 were both in the billions. They’ll survive.

The Code is not without its flaws, of course. While media companies have generally been supportive, some issues such as what constitutes a media organisation or whether the payments received from the digital platforms would be used to justify funding cuts to Australia’s public broadcasters have rightfully been highlighted. Fortunately change to the Code is possible, after all the first draft excluded the Australian Broadcasting Corporation and Special Broadcasting Service but thankfully this has been rectified. Even modifications to better suit Sir Tim’s vision are possible, as Tama Leaver suggests in his article for The Conversation.

Ultimately, the real issue is bigger than what the Code seeks to address. The fact that our day to day online interactions are dictated by commercial entities who seek to simultaneously sell us and sell to us is a major problem. Moreover, the fact that these companies would attempt to hold Australia to ransom until the terms of the code are favourable to them demonstrates the power that they wield and the need for tech giants to be reined in. Whether or not they will be remains to be seen.