Prepare for the next Great War: Big Tech versus the Nation-State

In my first column this year, I predicted that the next Great War will not be between nations, but between large technology companies and countries. It is both gratifying and worrying that this seems to be playing out in the very first month itself.

Tech major Google started it by firing a missive to the Australian government, declaring that it would stop its ubiquitous search service if the government approved a recent legislation, that would force it to pay media companies for linking to their news. Facebook closely followed by declaring that it will stop Australian users from sharing or posting links to news items if this bill was passed. The Australian government responded in a similar tone, with the Prime Minister Scott Morrison saying “We don’t respond to threats. Australia makes our rules for things you can do in Australia. That’s done in our parliament. It’s done by our government. And that’s how things work here in Australia.”

Tech platforms have been in the news recently more for privacy related concerns, and of harvesting user data for almost usurious profits. They have also been accused of influencing elections, accelerating mass conspiracy theories, de-platforming the President of the United States. As if all this was not controversial enough, why butt heads with the Prime Minister of a large, powerful country? The answer is that this war cry is an inevitable culmination of a debate which has been simmering for decades. Media companies have griped that platforms like Google and Facebook profit from the hard journalistic work done them, while paying them nothing for it. They claim that this has resulted in plummeting advertising revenues and closures of many newspapers, large and small. It has also led to the decline of quality journalism, as media companies cannot afford to keep and pay professional journalists any longer.

On the other hand, tech platforms claim that they actually benefit the media industry by directing it hordes of traffic, as the millions of users click through to them. They also assert that the Australian law would violate the principle of an open web. Tim Berners-Lee, the inventor of the World Wide Web, told an Australian Senate that “the code risks breaching a fundamental principle of the web by requiring payment for linking between certain content online. The ability to link freely, meaning without limitations regarding the content of the linked site and without monetary fees, is fundamental to how the web operates.” The managing director of Google Australia argued in a similar vein saying that this amounted to asking people to recommend a few cafes to a friend — and then getting a bill from the cafes for sharing that information. “When you put a price on linking to certain information, you break the way search engines work,” she said. “And you no longer have a free and open web.” The fact, however, is that the tech platforms go far beyond mere linking, or ‘sharing information like a friend’. They preview the news, show pictures, curate the content, and monetize it liberally through ads targeted to the readers. As Peter Lewis, Director of Center of Responsible Technology said in the New York Times: “…they don’t just give you information about where to get coffee — they follow you to the cafe, watch what you order and where you go next, then sell that knowledge to companies that want to market you something else.”

Curiously, however, the matter does not seem to be about the payments: just a few hours before this bellicose announcement, Google reached an agreement with France to pay news publications there. The issue seems to be far more about control and power.  

The Aussie law proposes that if Google and the media companies disagree on the price for the news content, an independent arbitration body will fix it. In France, on the other hand, Google has set the criteria for deciding the price. If the media company disagrees, this goes to court and gets stuck for years, prolonging the payment. The Aussie law will hasten this process, and bolster the weaker side, which is the media. The Australians have said as much, saying that this will level the field, and address the uneven bargaining powers. For Google and Facebook, this means that the ‘balance of power shifts to a third party’ something that they cannot tolerate, accustomed as they are to determine what the news is worth. The other aspect of the law is that the tech companies should give media a 28-day notice before changing the algorithms that decide what news appears where. This is anathema to Google and Facebook, since it makes them reveal their core manipulative strength, their black-box recommendation engines.

“I think Google and Facebook are seriously worried that other countries will join in Australia’s effort,” said Professor Johan Lidberg of Monash University. “This could eventually cause substantial revenue losses globally and serious loss of control, exemplified by the algorithm issue.” As more countries inevitably join in this jockeying for control, it will be interesting to see who wins this Great War – Big Tech or the Nation-State.

(This article was published as a Mint column on Feb 4, 2021)

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