Advertising War
Australia and the EU are not happy with US technology companies in general, but in particular Alphabet (GOOG), Facebook (FB), Microsoft (MSFT), and Apple (AAPL).
This discussion regards advertising giants Alphabet and Facebook.
Australia and the EU believe the advertising giants are stealing money from other publishers, especially news print, and/or are unfairly driving such companies out of business.
Crackdown in Spain
In 2015, Spain decided to tax Google simply for linking to other content.
Google responded appropriately. It told Spain to go to hell and pulled the plug entirely. Rather than pay companies to promote their content, Google pulled out of Spain, and has been out of that market ever since.
Google Tax
TechDirt has an interesting discussion regarding a Study of Spain’s ‘Google Tax’ on News and how much damage the tax did.
Governments across Europe, generally at the behest of traditional newspaper publishers, have been pushing for what they call an “ancillary copyright,” but which is much better referred to as a “snippet tax” or a “link tax.” Belgium was the first country to try it, and Google responded by removing complaining publications from Google News.
When it came time for Spain to try to appease its misguided and angry publishers, the government sought to avoid the tactics that Google had done in the past and thus made it mandatory to pay, saying that sites themselves couldn’t even opt-out of getting payments, even if they didn’t want them. In response to this, Google broke out the somewhat surprising “nuclear option” and shut down Google News in Spain entirely.
After the law went into effect, the Spanish Association of Publishers of Periodical Publications (AEEPP) commissioned an economic study about the impact of the new Spanish ancillary copyright law — and found (not surprisingly) that the legal change (and the shuttering of Google News and other aggregators) was absolutely harmful to the Spanish news media and innovation in general.
Google Threatens to kill Google News in Europe
Undaunted by the dismal results in Spain, the EU nannycrats still want to crack down on Google and Facebook.
In 2019, NiemanLab reported Google Threatens to kill Google News in Europe Over “Snippet Tax”.
The European Union is considering a set of changes to digital copyright that are, well, quite controversial. One of those would require Google and other platforms to pay publishers for the right to display anything more than the tiniest snippet of a story in its search results or elsewhere.
It’s true that — despite a decade’s haranguing from publishers that might lead you to think otherwise — Google doesn’t make much of its money from news-related content in search. It makes money when you search “dry cleaner in Boston” or “what’s a good toaster oven,” not “events in Syria.”
In 2014, Spain passed a “snippet tax” not unlike the one being considered by the EU. A 2017 study into what happened as a result found “the shutdown of Google News reduces overall news consumption by about 20% for treatment users, and it reduces page views on publishers other than Google News by 10%.“
Win-Win
If anything, the study results suggest Google ought to demand a price to link to stories not pay for the privilege of promoting other content.
It’s a bit more complicated because everyone benefits from the links including Google.
So let’s call it a wash, with everyone benefitting, including consumers. If everyone wins, what’s the beef?
With that, let’s flash forward to 2021.
Alphabet in Talks with Spanish Publishers to Bring Google News Back
On February 22, 2021, Reuters reported Alphabet in Talks with Spanish Publishers to Bring Google News Back.
Alphabet’s Google is negotiating individual licensing deals with a divided Spanish news industry that could allow the U.S. tech giant’s news service to resume in the country, three sources close to the matter told Reuters.
Google News, which links to third party content, closed in Spain in late 2014 in response to legislation which meant it had to pay a mandatory collective licensing fee to re-publish headlines or snippets of news.
Now the thorny issue is back on the table as Spain prepares to implement the 2019 European Union copyright directive by June. While that requires Google, Facebook and others to share revenue with publishers, the government could allow the companies to negotiate individual deals with content providers.
A spokeswoman for Google Spain said publishers should be free to choose their own business model. “The copyright law should not make it mandatory to put a paid license in place,” she said.
The EU rules, do not force online platforms to pay for links posted to their news site by publishers, the main grievance for Facebook in Australia, so their implementation could pave the way for a series of deals.
Publishers Free to Choose Their Own Business Model
Bingo.
That is exactly the way it should be and exactly as I proposed in my previous article, and I had not seen Google’s response to Spain when I wrote it.
Facebook vs Australia, Who Wins the Debate?
Let’s recap Australia with a look at my previous post Facebook vs Australia, Who Wins the Debate?
Australia passed a law that would force advertising giants such as Facebook and Google to pay media companies for monetizing their news content when it’s posted to their social media platforms. Facebook responded with an Overly Broad Content Block [Just as Google did in Spain].
In the wake of Facebook’s unilateral censorship of all sorts of Facebook pages, parliamentarians in the country accused the tech giant of “an assault on a sovereign nation”.
The discussion was entirely one-sided on Twitter. No one defended either Facebook or Google until I chimed in.
What Copyright Issue?
If a company does not want links to its articles on FB or Google all they have to do is say STOP. Right?
That led to this silly idea from a “Crazy Realist”
The media companies don’t want Google and Facebook to “stop” but they do unfairly demand a “Snippet Tax”.
In response, Google pulled the plug in Spain and Facebook did in Australia.
In Praise of Google’s and Facebook’s Responses
I cheer the responses of Google and Facebook although the latter was more than a bit sloppy.
Hilarious Video on Australia’s Law
My lead image is from that video. Please play it. It’s a hilarious and accurate take.
What’s It Really About?
The above video hits the nail squarely. I found the video today via TechDirt.
As I’ve discussed previously, there’s nothing to bargain over when you should never have to pay for links. The links are free. There’s no bargaining imbalance, because there’s nothing to bargain over. And, it’s clearly a tax if the only end result is that Google and Facebook have to fork over money because the government tells them to. That’s… a tax.
Anyway, that’s why I’m happy to see The Juice Media, an Australian outfit that is famous for making hilarious “Honest Government Ads”, usually for the Australian government (but sometimes for elsewhere) has put out a new “ad” about the link tax in which they explain how it was a fight to take money from one set of giant rich companies, and give it to another set of giant rich companies, and not to do anything useful in between.
Fight to Save the Little Guy?
Contrary to the widespread myth the EU and Australia are in a fight to save small publishers, this battle is anything but, as Spain proved.
A Word About EU and Australian Nannycrats
Companies like Microsoft, Apple, Google, and Facebook could never come to be in the EU or Australia.
The nannycrats in those countries would destroy them in the name of competition.
Technology companies exist in the US for a reason: The US has open free markets, freedom of speech, and better tax codes, at least on a relative basis.
Consumers use Google, Microsoft, and Facebook because they like the products.
Google spawned amazing self-driving technology, Google Earth, and countless other ideas that never would have or could have happened in the EU because the EU would have broken them up in a futile effort to save the local bookstore.
The local bookstore is doomed, no matter what the EU and Australia do. So are malls and so is newsprint.
The irony is the snippet tax as designed by Australia and Spain would speed up, not halt, the end of printed media.
Mish
I am thinking about telling Facebook they need to pay me every time I post something or upload a picture as that is my content. I wonder if they will ban me. I wonder if I can add a watermark saying this is copyrighted and if you share it you must pay me. 1 cent. LOL
Google has been going downhill for a while now. Their search results are no longer based on best fit for your search. They clearly prioritize commercial sites and sites that fit their politics. There are pages that google completely blocks due to inconvenient facts. I frequently have to use alta vista to get better results. Similar to how Bing heavily prioritizes microsoft.com.
I learned something new today. I never knew that Google News existed before Mish mentioned it so I looked it up. A quick ask-around revealed that it is not used much if at all. I can live without it as I live without Facebook.
If you have an Android phone (or at least a Google Pixel as I do), I can left swipe on my hope page and it will bring up the Google News feed. They usually have a very good selection of stories based on my interests that Google puts together as they watch what I do on the web.
Not sure if Mish’s take is correct? Australian media companies are signing deals with Facebook and Google. Without knowing the terms of these deals, we don’t know who got the upper hand. Presumably the Australian media companies are better off than they were before, in which case the Australian government won?
Given the importance of media to healthy democracy, I’m not comfortable blindly relying on the free markets to sort out what happens with respect to media. This is an area in which governments need to be proactive.
I would especially like to see the agreement made with respect to the diffusion of official government news. I would guess that the Australian government won on that one.
Truth be told kicking out these companies oit countries is better for that country. The world existed before the internet. Many igen and millenials cant imagine this.
Do those places really NEED Google and Facebook? They’ve been around for centuries without them.
It was never a problem when Google just provided links with a little bit of descriptive text.
Now in some cases they provide the entire article without actually linking to the source website. The point of creating great content is to attract viewers to your site, but when someone completely copies your work without giving you the payoff of attracting new users then how is it a win win anymore.
“Now in some cases they provide the entire article without actually linking to the source website. “
Provide an example.
They would be sued if they did so without an agreement.
I always assumed these pages were with the permission of the news organizations, but from their complaints it appears they aren’t.
The link you provide goes to the CBS website for the article. So what is the problem you are attempting to complain about?
What happened to the “Invisible Hand”?
Well the url I pasted isn’t what’s showing up. I’ll break it up so it doesn’t turn into a link. Basically it’s the news article sitting inside a Google page. I’ve had problems with these kinds of pages because it makes it harder to reference the actual source.
https:
//www.google.com
/amp/s/www.cbsnews.com/amp/news/texas-power-outage-regulation-energy-market/
AMP can be disabled by publishers at google , and legally
As for not fetching AMP pages, some ideas
It’s almost funny…I just went to catch up on how this has played out in Spain . Starting with
they point out that revenue from the measures introduced in 2015 reached 10 thousand euros a year, where it was supposed to bring in 80 million. Apart from a large loss of traffic to media due to aggregators not facilitating their usual service, only one remaining aggregator paid its fees. As google was the main target to bring in the 80 million this left the whole project dud. In 2018 the law was actually struck down and not rewritten, of all things because it was considered unfair to large families ? The 2015 law was introduced by PP (right) opposed by PSOE (socialists).
So why didn’t google start up again in Spain. Firstly I expect they just don’t like being messed around, but that is only one facet… because the PSOE now is having its turn at trying for the jackpot, and of course they set their sights higher at 1.2 Billion. A new tax was introduced to this end…
which by some strange coincidence was approved also in 2018. This is a 3% tax on advertising revenue, on companies that are sales intermediaries, and on data sales , applicable only to companies with global revenue of 750 million, or Spanish revenue of 3 million. The government is saying it is only following EU proposals and celebrates being first to implement them. EU might come up with a similar regional law. Payments only kicked in last year I think.
So, you have this new tax now in Spain. I correct the above – it entered into force in January this year. The result is the cost being passed through to the customer according to
Here is a Q&A in Spanish and they’ve bumped up hoped for revenue to 1.8 billion.
Saying Brussels thinks it can bring in 6 billion for EU (admin?) if applied regionally.
Enough.
The evolution of ARPANET to the internet itself comes from an EU government funded institution, CERN. That aside, historically and mainly true today you can’t buy a computer and say you don’t want Microsoft Windows 10. You have to buy it.
“The complaint centered on the license practices at the time which required royalties from each computer sold by a supplier of Microsoft’s operating system, whether or not the unit actually contained the Windows operating system.”
wikipedia Microsoft_Corp._v._Commission
The assertion that these companies haven’t benefited from inherent monopolies doesn’t hold water for me. Facebook does not allow merging in the feed of competitive services, whereas other communication providers conform to compatible standards. Is the incumbent Verizon free to prevent calls to a new telecoms provider?
-Only- Apple may sell mobile apps for their phones. Alternative stores are not permitted. The take? 30%. Where is this USA competitive market?
etc etc
As far as I make out the market is cooked, has been for several years. Prices on mid range from five years ago are often up, but the devices are hardly any better, and any improvements superfluous to most needs. The low end market is cheaper and better for the price, but there is a lot of junk also. As far as OS goes there is a fair amount of trust at work, but you find that in all commerce. Ultimately, you aren’t forced to use any product and alternatives are available if you don’t want to be caught in any framework… and yes they are behind a little but that is what large corps have as advantage, money for R&D . As long as they aren’t putting in backdoors or restricting competition outside of own framework policy what gives ? I don’t like monopoly practice but I don’t like it being overplayed either. Same goes for social media, just don’t use it. Same goes for search providers, I couldn’t care for the ads but don’t read them and only use where provides acceptable results. Same goes for the likes of Amazon, I don’t like the effect on local small businesses but you could say the same for malls or large outlet. I don’t use Amazon, but very occasionally order from whoever online, when so it’s a welcome service. Often I think it is as much customer or societal choice as provider. I like bookstores, the only decent longstanding ones locally closed after GFC – a complete change in custom and clientel, in spending habits, not Amazon. So it’s just too easy to pick on the obvious culprits, big government or socialistic agenda is worse than big business with monopolistic tendency, if only because the latter is made possible by the first, they often work together, and with modern finance mixed into the bargain. To expect government to equalise it all is like putting a fox in charge of a henhouse.
i agree but i think this kind of choice is kind of limited. so for example you have a choice you can not use chrome, you can use firefox.
Social media to my mind, is crossing the line to infrastructure.
You possibly and certainly I are old school and see social media as an optional medium but today really its the telephone network.
i would also like to add to my earlier comment that the google vs oracle case over copyright infringement has now rumbled on for a full decade, i.e. in practise there is no recourse to a judicial decision in the states (which is appalling).
And for these “competive services” i cannot opt out of tracking. i use firefox i disable the root trackers, but i cannot disable being tracked by client fingerprinting.
The quartet/cartel had no compunction about disabling Parler. Of course Parler has had some criminal intent expressed, they all have. Yet Parler was shut down.
Not as a rebuttal against Anda who i agree with, but i can say again, where is the competition? The US is lucky that the Australians are standing up and saying no, because these big 4 tech companies are actively lobbying and involved with the political system. The entirety is appalling. And if the US competition system is so robust… how come the future of CPU design is coming from the UK? hmmm?
I use Google Chrome most of the time. Somehow, through Chrome, I can watch Sky news Australia right side up rather than upside down. Thank you, Google.