The price of offering a free service of allowing links to news on platforms like Google and Facebook is going up. This thanks to the UK.
When Google caved to Australian demands (with Facebook following suit) to pay publishers for links on their platforms via the link tax, observers like us said that it was a horrible mistake on the platforms part. If throwing the entire internet under the bus wasn’t enough in making such a decision, that decision will continue to bite both platforms in the rear. Specifically, publishers from other countries were going to demand their pound of flesh from Google and Facebook, costing the platforms a seemingly unlimited amount of cash.
Why did the platforms do this in the first place? The leading theory is that it was actually an anti-competitive move. If it costs billions of dollars for a search engine or a social media platform just to get so-called “licenses” for the privilege of allowing links to news articles, that would make it impossible for any potential competitor to show up and start competing against Facebook and Google. Obviously, with the criticisms we mentioned, this is a very short sighted concept because it depends on this idea that Australia would be the only country to push a law like this. It was a laughably optimistic idea that was doomed from the start.
Critics like us were proven correct in all of this. With places like Europe, the US, and, of course, Canada also pushing for similar link taxes, the cost of offering a free service of allowing publishers to post links to their news services is going up quickly, starting at hundreds of millions and a cap of unlimited liability. Yes, Meta and Alphabet are, indisputably, really large companies, but that doesn’t necessarily mean that the money flowing through them are unlimited. No company can absorb quickly escalating liabilities forever before something gives.
Indeed, that is what is happening with these two companies. In fact, Facebook explicitly stated that they were not only potentially pulling news links from their platform, but are also moving to ending deals with US publishers. Throw in a drop in ad revenue in anticipation of a recession later this which also forced massive layoffs as part of cost cutting measures, and you have a multitude of reasons for the likes of Facebook and Google to just drop news links altogether. The signs are so obvious, even some of the most vocal supporters of Bill C-18 are admitting that the threat to pull news links from the platforms might not be a bluff after all.
If you somehow stubbornly believe that, despite all of the evidence, that Google and Facebook don’t have sufficient motivation to just drop news links in Canada, the UK has reportedly given the likes of Google and Facebook an additional 170 million or more reasons to drop news links altogether. From the Press Gazette:
UK news industry insiders expect Rishi Sunak’s Government to lay out legislation that would force Google and Facebook to pay for news within a month, Press Gazette understands.
The Digital Markets, Competition and Consumer Bill, which news bosses hope will pass into law in 2024 after being introduced to parliament in late April this year, could be a financial game-changer for Fleet Street, the regional press and broadcasters.
According to a conservative estimate calculated by Press Gazette, Google and Facebook could end up paying out more than £170m a year to national newspapers alone.
If passed, some publishers hope and believe that the legislation could ultimately force other technology companies – Microsoft, Apple, Tiktok, Twitter and others – to agree cash-for-content deals with British publishers.
So what does this mean? It means that yet another country is demanding payments for allowing publishers to post links on various platforms. Once again, history is repeating itself. What’s more, Google and Facebook are, predictably, right back at square one. Should they just cave to these pressures and stupidly go along with a link tax in a country like Canada, thus encouraging more countries to follow suit, or do they draw the line and finally start pushing back against this ridiculous concept?
If the report above is anything to go by, we don’t even have to wait for another country to go full stupid and push for link taxes. History is already threatening to repeat itself. What’s more, even if Google and Facebook somehow manages to foot the bills of publishers in every country, those expenses are not going to stop going up. In 2021, we already began seeing reports that publishers bicker that they aren’t getting enough money and demand even more money for linking. Specifically, they are pointing to each other and saying that someone else is getting a better deal and, therefore, they demand more money.
The real question is, how much longer are Google and Facebook going to let this nonsense go before they finally stand up and say “enough”? After all, their existence isn’t solely to just keep dispensing money to hedge funds running news organizations indefinitely. There’s other reasons for their existence. The longer this link tax nonsense goes on, the more Meta and Alphabets existence is to simply act as free ATMs for these organizations. The power to stop all of this is in these platforms hands. The question is, will they finally exercise that power?
Drew Wilson on Twitter: @icecube85 and Facebook.
