Privacy erosion by design: why the Federal Court should throw the book at Google over location data tracking


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Jeannie Marie Paterson, The University of Melbourne and Elise Bant, The University of Western AustraliaThe Australian Competition and Consumer Commission has had a significant win against Google. The Federal Court found Google misled some Android users about how to disable personal location tracking.

Will this decision actually change the behaviour of the big tech companies? The answer will depend on the size of the penalty awarded in response to the misconduct.




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ACCC ‘world first’: Australia’s Federal Court found Google misled users about personal location data


In theory, the penalty is A$1.1 million per contravention. There is a contravention each time a reasonable person in the relevant class is misled. So the total award could, in theory, amount to many millions of dollars.

But the actual penalty will depend on how the court characterises the misconduct. We believe Google’s behaviour should not be treated as a simple accident, and the Federal Court should issue a heavy fine to deter Google and other companies from behaving this way in future.

Misleading conduct and privacy settings

The case arose from the representations made by Google to users of Android phones in 2018 about how it obtained personal location data.

The Federal Court held Google had misled some consumers by representing that “having Web & App Activity turned ‘on’ would not allow Google to obtain, retain and use personal data about the user’s location”.

In other words, some consumers were misled into thinking they could control Google’s location data collection practices by switching “off” Location History, whereas Web & App Activity also needed to be disabled to provide this protection.




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The ACCC also argued consumers reading Google’s privacy statement would be misled into thinking personal data was collected for their own benefit rather than Google’s. However, the court dismissed this argument on the grounds that reasonable users wanting to turn the Location History “off”

would have assumed that Google was obtaining as much commercial advantage as it could from use of the user’s personal location data.

This is surprising and might deserve further attention from regulators concerned to protect consumers from corporations “data harvesting” for profit.

How much should Google pay?

The penalty and other enforcement orders against Google will be made at a later date.

The aim of the penalty is to deter Google specifically, and other firms like Google, from engaging in misleading conduct again. If penalties are too low they may be treated by wrongdoing firms as merely a “cost of doing business”.

However, in circumstances where there is a high degree of corporate culpability, the Federal Court has shown willingness to award higher amounts than in the past. This has occurred even where the regulator has not sought higher penalties. In the recent Volkswagen Aktiengesellschaft v ACCC judgement, the full Federal Court confirmed an award of A$125 million against Volkswagen for making false representations about compliance with Australian diesel emissions standards.

The Federal Court found Google’s information about local data tracking was misleading.
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In setting Google’s penalty, a court will consider factors such as the nature and extent of the misleading conduct and any loss to consumers. The court will also take into account whether the wrongdoer was involved in “deliberate, covert or reckless conduct, as opposed to negligence or carelessness”.

At this point, Google may well argue that only some consumers were misled, that it was possible for consumers to be informed if they read more about Google’s privacy policies, that it was only one slip-up, and that its contravention of the law was unintentional. These might seem to reduce the seriousness or at least the moral culpability of the offence.

But we argue they should not unduly cap the penalty awarded. Google’s conduct may not appear as “egregious and deliberately deceptive” as the Volkswagen case.

But equally Google is a massively profitable company that makes its money precisely from obtaining, sorting and using its users’ personal data. We think therefore the court should look at the number of Android users potentially affected by the misleading conduct and Google’s responsibility for its own choice architecture, and work from there.

Only some consumers?

The Federal Court acknowledged not all consumers would be misled by Google’s representations. The court accepted many consumers would simply accept the privacy terms without reviewing them, an outcome consistent with the so-called privacy paradox. Others would review the terms and click through to more information about the options for limiting Google’s use of personal data to discover the scope of what was collected under the “Web & App Activity” default.




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This might sound like the court was condoning consumers’ carelessness. In fact the court made use of insights from economists about the behavioural biases of consumers in making decisions.

Consumers have limited time to read legal terms and limited ability to understand the future risks arising from those terms. Thus, if consumers are concerned about privacy they might try to limit data collection by selecting various options, but are unlikely to be able to read and understand privacy legalese like a trained lawyer or with the background understanding of a data scientist.

If one option is labelled “Location History”, it is entirely rational for everyday consumers to assume turning it off limits location data collection by Google.

The number of consumers misled by Google’s representations will be difficult to assess. But even if a small proportion of Android users were misled, that will be a very large number of people.

There was evidence before the Federal Court that, after press reports of the tracking problem, the number of consumers switching off the “Web” option increased by 500%. Moreover, Google makes considerable profit from the large amounts of personal data it gathers and retains, and profit is important when it comes deterrence.

Google’s choice architecture

It has also been revealed that some employees at Google were not aware of the problem until an exposé in the press. An urgent meeting was held, referred to internally as the “Oh Shit” meeting.

The individual Google employees at the “Oh Shit” meeting may not have been aware of the details of the system. But that is not the point.

It is the company fault that is the question. And a company’s culpability is not just determined by what some executive or senior employee knew or didn’t know about its processes. Google’s corporate mindset is manifested or revealed in the systems it designs and puts in place.




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Google designed the information system that faced consumers trying to manage their privacy settings. This kind of system design is sometimes referred to as “choice architecture”.

Here the choices offered to consumers steered them away from opting out of Google collecting, retaining and using personal location data.

The “Other Options” (for privacy) information failed to refer to the fact that location tracking was carried out via other processes beyond the one labelled “Location History”. Plus, the default option for “Web & App Activity” (which included location tracking) was set as “on”.

This privacy eroding system arose via the design of the “choice architecture”. It therefore warrants a serious penalty.The Conversation

Jeannie Marie Paterson, Professor of Law, The University of Melbourne and Elise Bant, Professor of Law, The University of Western Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

ACCC ‘world first’: Australia’s Federal Court found Google misled users about personal location data


Henry Perks / Unsplash

Katharine Kemp, UNSWThe Federal Court has found Google misled some users about personal location data collected through Android devices for two years, from January 2017 to December 2018.

The Australian Competition & Consumer Commission (ACCC) says this decision is a “world first” in relation to Google’s location privacy settings. The ACCC now intends to seek various orders against Google. These will include monetary penalties under the Australian Consumer Law (ACL), which could be up to A$10 million or 10% of Google’s local turnover.

Other companies too should be warned that representations in their privacy policies and privacy settings could lead to similar liability under the ACL.

But this won’t be a complete solution to the problem of many companies concealing what they do with data, including the way they share consumers’ personal information.

How did Google mislead consumers about their location history?

The Federal Court found Google’s previous location history settings would have led some reasonable consumers to believe they could prevent their location data being saved to their Google account. In fact, selecting “Don’t save my Location History in my Google Account” alone could not achieve this outcome.

Users needed to change an additional, separate setting to stop location data from being saved to their Google account. In particular, they needed to navigate to “Web & App Activity” and select “Don’t save my Web & App Activity to my Google Account”, even if they had already selected the “Don’t save” option under “Location History”.




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ACCC Chair Rod Sims responded to the Federal Court’s findings, saying:

This is an important victory for consumers, especially anyone concerned about their privacy online, as the Court’s decision sends a strong message to Google and others that big businesses must not mislead their customers.

Google has since changed the way these settings are presented to consumers, but is still liable for the conduct the court found was likely to mislead some reasonable consumers for two years in 2017 and 2018.

ACCC has misleading privacy policies in its sights

This is the second recent case in which the ACCC has succeeded in establishing misleading conduct in a company’s representations about its use of consumer data.

In 2020, the medical appointment booking app HealthEngine admitted it had disclosed more than 135,000 patients’ non-clinical personal information to insurance brokers without the informed consent of those patients. HealthEngine paid fines of A$2.9 million, including approximately A$1.4 million relating to this misleading conduct.




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The ACCC has two similar cases in the wings, including another case regarding Google’s privacy-related notifications and a case about Facebook’s representations about a supposedly privacy-enhancing app called Onavo.

In bringing proceedings against companies for misleading conduct in their privacy policies, the ACCC is following the US Federal Trade Commission which has sued many US companies for misleading privacy policies.

The ACCC has more cases in the wings about data privacy.
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Will this solve the problem of confusing and unfair privacy policies?

The ACCC’s success against Google and HealthEngine in these cases sends an important message to companies: they must not mislead consumers when they publish privacy policies and privacy settings. And they may receive significant fines if they do.

However, this will not be enough to stop companies from setting privacy-degrading terms for their users, if they spell such conditions out in the fine print. Such terms are currently commonplace, even though consumers are increasingly concerned about their privacy and want more privacy options.

Consider the US experience. The US Federal Trade Commission brought action against the creators of a flashlight app for publishing a privacy policy which didn’t reveal the app was tracking and sharing users’ location information with third parties.




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However, in the agreement settling this claim, the solution was for the creators to rewrite the privacy policy to disclose that users’ location and device ID data are shared with third parties. The question of whether this practice was legitimate or proportionate was not considered.

Major changes to Australian privacy laws will also be required before companies will be prevented from pervasively tracking consumers who do not wish to be tracked. The current review of the federal Privacy Act could be the beginning of a process to obtain fairer privacy practices for consumers, but any reforms from this review will be a long time coming.


This is an edited version of an article that originally appeared on UNSW Newsroom.The Conversation

Katharine Kemp, Senior Lecturer, Faculty of Law, UNSW, and Academic Lead, UNSW Grand Challenge on Trust, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

This week’s changes are a win for Facebook, Google and the government — but what was lost along the way?



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Rob Nicholls, UNSW

After almost a year of heated discussion about the News Media Bargaining Code, there will shortly be a new law of the land – one that’s unlikely to be applied to the platforms it was intended to reign in. But that’s not to say it hasn’t done its job.

With some final tweaks expected to the draft legislation, Facebook on Tuesday announced it would restore news for Australian users and strike up commercial agreements with local publishers. It signed its first deal with Seven West media yesterday.

Google has already done deals with News Corp, Nine Fairfax, Seven West Media, The Guardian and regional news company ACM, turning back on its initial threat to pull Google Search from Australia.

Meanwhile, Facebook threatened to stop providing Australians access to news — and did (while also blocking domestic violence helplines, children’s cancer charities and the Royal Australian College of Physicians).

In return, the federal government said it would stop all advertising campaigns on the platform. Interestingly, it’s this move which most likely “assisted” the recent negotiated outcome with Facebook.

The amendments

The changes made to the code — other than the opportunity to sell advertising to the Commonwealth again — were small, but important. It’s worth remembering the code’s aim was to balance out the bargaining imbalance between big tech platforms and news media businesses.

Essentially, it provides a mechanism to force a deal when a commercial outcome can’t be reached voluntarily. The code is mandatory, since the Australian Competition and Consumer Commission (ACCC) took the view the platforms would not otherwise get to a commercial offer, let alone a commercial settlement.

As set out by Treasurer Josh Frydenberg, there were four changes made that have met Facebook’s needs:

  1. before a digital platform is made subject to the code by being “designated”, the minister must first take into account whether it has reached commercial agreements with news media businesses

  2. the government must give at least one month’s notice of designation to any platform it intends to make subject to the code

  3. the non-discrimination provisions (crafted as an anti-avoidance mechanism) will not be triggered in respect to remuneration amounts or commercial outcomes that arise in the course of usual business practice

  4. final offer arbitration will be a last resort and should be preceded by good faith mediation, provided this lasts no longer than two months.




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A major change?

The above amendments made by the government are not major, in terms of changing the scope of the News Media Bargaining Code. However, they do include some important clarifications regarding how the code will operate.

Both Google and Facebook were very concerned the approach of “final offer arbitration” would adversely affect them. In this, if a deal couldn’t be struck, both the platform and media business would have to present their offers and defer to an arbitrator to choose one.

Google and Facebook initially argued for “commercial arbitration”, where the arbitrator acts with more discretion. Commercial arbitration tends to favour the party with the most information or bargaining power.

The compromise of requiring good faith mediation before any compulsory arbitration (whether commercial or final offer arbitration) is a classic dispute resolution approach.

Win some, lose some

The News Media Bargaining Code has changed in a way that is a compromise, but hasn’t lost its original intention. The process of negotiating changes to the code has revealed the private values of Facebook, Google and any similar parties that could be impacted by the code.

The exposure draft, the introduction of the Bill, the Senate committee and Facebook’s petulant actions: all have acted to identify a financial outcome for each of Google, Facebook and the Australian news publishers.

The process has been a classic, but painful, exchange of information that would otherwise have been held close to the players’ respective chests.

For Google, it has shown Google Search must remain untouched, even if this means forking out millions in a matter of days. For Facebook, it has demonstrated that rapidly changing social media offerings (such as trying to remove news in Australia) can’t be done without major complications.

It may be too soon to judge whether Facebook’s approach of taking its lobbying to the brink worked in its favour, or to its detriment. The platform’s first interactions with the new UK Digital Markets Unit (a regulatory regime targeted at big tech firms) will likely shed some light.

And finally, the ACCC can claim it was right in its initial recommendation; after a long drought, there will soon be money flowing to public interest journalism.




Read more:
Why Google is now funnelling millions into media outlets, as Facebook pulls news for Australia


Who pays?

The intention of the News Media Bargaining Code was to create an environment where commercial deals would be struck between the platforms and news media businesses in Australia.

Now, under several deals, Google and Facebook will pay Australian news media businesses tens of millions of dollars each year for locally created content.

According to an Australian Financial Review report, Facebook Australia paid a little under A$17 million in tax in 2019.
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There’s also a reasonable expectation regional news businesses will receive funds in exchange for regional news — although a clear standard offer is yet to be made by the platforms.

This development will not change the inevitable shift of the news business model to a largely digital environment. But it does balance the value proposition between news creation and news curation.

It has also made clear to Facebook, Google and news media businesses that they exist and operate in a symbiosis. The status of this relationship? Well, it’s complicated.




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The Conversation


Rob Nicholls, Associate professor in regulation and governance, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The old news business model is broken: making Google and Facebook pay won’t save journalism


Amanda Lotz, Queensland University of Technology

The federal government is talking tough about making Google and Facebook pay Australian news businesses for linking to, or featuring, these publishers’ content.

The digital platforms have been talking equally tough. Facebook is threatening to remove Australian news stories and Google says it will shut off search to Australia if the government pushes ahead with its “mandatory bargaining code”.

The code is meant to help alleviate the revenue crisis facing news publishers. Over the past two decades they have made deep cuts to newsrooms. Scores of local print papers have become “digital only” or been shut down completely.




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If legislated, the code will require the platforms to negotiate payments to news publishers, as well as disclose changes in algorithms affecting traffic to news sites.

But the code is unlikely to do much to fix the crisis faced by journalism in the internet age. It isn’t even a band-aid on the problem.

The traditional commercial news business model is broken beyond repair. If the government wants to save the social benefit of public-interest journalism, it must look elsewhere.

Newspapers didn’t sell news, but readers

To understand why the commercial news model is so broken, we first need to recognise what the primary business of commercial news media has been: attracting an audience that can be sold to advertisers.

Newspapers attracted readers with news and feature journalism that provided public value, but also information of interest such as weather forecasts, sports scores, stock prices, TV and radio guides and comics. Readers even sought out papers for their advertisements – in particular the “classifieds” for jobs, cars and real estate.

Before the internet the newspaper was the only place to access much of this information. This broad bundle of content attracted a wide range of readers, which the economics of newspapers – particularly the cost of producing the journalism – required.

Why the business model is broken

Internet technologies introduced two changes that have dismantled the newspaper business model.

They offered new and better ways to connect buyers and sellers, pulling advertiser spending away from newspapers. More than 70% of revenue for a typical daily newspaper came from advertising. Before 2000 print media attracted nearly 60% of Australian advertiser dollars, according to an analysis for the Australian Competition and Consumer Commission’s Digital Platforms Inquiry. By 2017 it was just 12%.


Australian advertising expenditure by media format and digital platform


Internet technologies also provided better ways to access the non-journalism information that had made the bundled paper valuable to a mass of readers.

Readers also now access news in many other places, through news apps, aggregators and social media feeds such as Twitter, Reddit, Apple News, Flipboard and many others, including Facebook and Google. Research by the University of Canberra’s News and Media Research Centre published in 2019 found just 30% of Australian news consumers accessed online news directly from news publishers’ websites.

The bargaining code doesn’t solve the main problem

If Google and Facebook are “to blame” for news publishers’ malaise, it is not in the way the bargaining code suggests. Separate from their linking to, or featuring, these publishers’ content, the digital platforms are just more effective vehicles for advertisers seeking to buy consumers’ attention. They serve ads based on consumer interests or in relation to a specific search.

The simple fact is news publishers’ core content is not that important to the platforms’ profitability.

Research by the Reuters Institute for the Study of Journalism during the 2019 UK general election – tracking 1,711 people aged 18-65 across mobile and desktop devices for six weeks – found news took up just 3% of their time online (about 16 minutes and 22 visits to news sites a week).

So if stories from Australian news outlets disappeared from Facebook or Google search results, it would barely make a scratch on their appeal to advertisers.




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Save journalism, not commercial publishers

The Australian Competition and Consumer Commission’s Digital Platforms Inquiry has rightly noted the revenue crisis has crippled commercial provision of public-interest journalism “that performs a critical role in the effective functioning of democracy at all levels of government”.

But the core of the problem is that funding such journalism through advertising is no longer viable. Other solutions are needed – locally and nationally – to ensure its survival.




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Commercial news organisations no longer offer value to advertisers. Instead of searching for ways to make an obsolete business solvent, efforts should focus on alternative ways to fund public-interest journalism.

More funding for independent public broadcasters is one solution, and incentives for philanthropic funding and non-profit journalism organisations are proving successful in other countries.

It’s a global problem. To solve the crisis in Australia will require focusing on the core problem and thinking bigger than a bargaining code.


For transparency, please note The Conversation has also made a submission to the Senate inquiry regarding the News Media and Digital Platforms Mandatory Bargaining Code.The Conversation

Amanda Lotz, Professor of Media Studies, Queensland University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

If Google does pull its search engine out of Australia, there are alternatives



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Gianluca Demartini, The University of Queensland

The Australian government’s push to make Google pay news organisations for linking to their content has seen the search giant threaten to pull out of Australia.

Google Australia’s managing director Mel Silva said if the government’s proposal goes ahead, “we would have no real choice but to stop making Google Search available in Australia”.

Prime Minister Scott Morrison pushed back saying he won’t respond to “threats”. Even the Council of Small Business Organisations Australia says Google needs “strong and stringent” regulation because of its monopoly on searching the web.

What if Google pulls out?

Google’s proposal to make Google Search unavailable in Australia means we would need to search the web using other systems and tools. If this really happens, we could no longer go to google.com and google.com.au to search the web.




Read more:
It’s not ‘fair’ and it won’t work: an argument against the ACCC forcing Google and Facebook to pay for news


It is important to note that Google is not just web search. Google’s parent company Alphabet Inc also runs key web portals such as YouTube, and productivity tools such as Gmail, Google Calendar, Google Docs and Google Maps (which actually started in Australia). Those services are not going to be removed from the Australian market, even if web search does get pulled out.

Online advertising is another sector in which Google is the market leader and where it makes money. Pulling Google web search out from Australia does not mean businesses would no longer be able to advertise using Google’s services.

But with no Google Search here, those adverts would no longer appear ahead of any other search results and be visited by Australian users.

A Google Search result showing an ad for The Conversation ahead of any search results.
Google Search places paid advertising ahead of any search results.
Google.com/screenshot

Businesses would still be able to put their adverts on other Australian websites that use the Google Ads service.

The issue with this scenario is that Google’s key competitive advantage is the ability to access data from people using its search services. Pulling web search out from the Australian market would mean Google missing out on that data from people in Australia.

The alternatives to Google

Google is the dominant search engine in Australia — it has 94% of the web search market in Australia — but there are other search services.

The second most popular search engine in Australia is Bing, developed by Microsoft and often integrated into other Microsoft products such as its Windows operating system and Office tools.

Another less popular search option is Yahoo, which also offers its own news and email service.

Other alternatives include niche search engines that offer unique tools with special features.

For example, DuckDuckGo is a search engine that has recently risen in popularity thanks to a commitment to protecting its users’ privacy.

The DuckDuckGo homepage
DuckDuckGo is gaining support.
DuckDuckGo/Screen shot

Contrary to the web search products from Google and Microsoft, DuckDuckGo does not store its users’ search queries or track their interactions with the system.

The quality of DuckDuckGo’s search results has improved over time, and is now comparable to that of the most popular search engines.

It says it now processes a daily average of more than 90 million search queries, up from just over 51 million the same time last year.

Despite not drawing on users’ data to refine its search algorithms, the technology behind DuckDuckGo and other smaller players is based on the same machine-learning methods that others are using.

Search the web, save the planet

Another interesting and recent proposal of an alternative web search engine is Ecosia. This system is unique as it focuses on sustainability and positive climate impact.

Its mission is to reinvest the income generated by search advertisements (the same business model Google Search is using) to plant trees in key areas around the world.

So far, it says it has 15 million users and has contributed to planting more than 100 million trees, about 1.3 every second.

Will Google really abandon Australia?

Tim Berners-Lee, widely regarded as the inventor of the web, has pointed out that the idea of asking web platforms to pay to post links runs counter to his fundamental concept.




Read more:
Web’s inventor says news media bargaining code could break the internet. He’s right — but there’s a fix


That said, it is also unfair for a search engine to make money using content that others have created.

It is also true that most of Google’s revenue already comes from asking others to pay for links on the web. This is how Google’s online advertising works: Google Ads makes advertisers pay for every impression users get or click users make to navigate to the advertised web page.

If users end up buying the advertised product, Google gets an even higher payment.

More likely than Google pulling out of the Australian market, the government and the search giant should diplomatically find a compromise in which Google still provides its web search product in Australia and there will be a return to news organisations for Google making use of their content.The Conversation

Gianluca Demartini, Associate professor, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Web’s inventor says news media bargaining code could break the internet. He’s right — but there’s a fix


Tama Leaver, Curtin University

The inventor of the World Wide Web, Tim Berners-Lee, has raised concerns that Australia’s proposed News Media and Digital Platforms Mandatory Bargaining Code could fundamentally break the internet as we know it.

His concerns are valid. However, they could be addressed through minor changes to the proposed code.

How could the code break the web?

The news media bargaining code aims to level the playing field between media companies and online giants. It would do this by forcing Facebook and Google to pay Australian news businesses for content linked to, or featured, on their platforms.

In a submission to the Senate inquiry about the code, Berners-Lee wrote:

Specifically, I am concerned 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.

Currently, one of the most basic underlying principles of the web is there is no cost involved in creating a hypertext link (or simply a “link”) to any other page or object online.

When Berners-Lee first devised the World Wide Web in 1989, he effectively gave away the idea and associated software for free, to ensure nobody would or could charge for using its protocols.

He argues the news media bargaining code could set a legal precedent allowing someone to charge for linking, which would let the genie out of the bottle — and plenty more attempts to charge for linking to content would appear.

If the precedent were set that people could be charged for simply linking to content online, it’s possible the underlying principle of linking would be disrupted.

As a result, there would likely be many attempts by both legitimate companies and scammers to charge users for what is currently free.

While supporting the “right of publishers and content creators to be properly rewarded for their work”, Berners-Lee asks the code be amended to maintain the principle of allowing free linking between content.




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Google and Facebook don’t just link to content

Part of the issue here is Google and Facebook don’t just collect a list of interesting links to news content. Rather the way they find, sort, curate and present news content adds value for their users.

They don’t just link to news content, they reframe it. It is often in that reframing that advertisements appear, and this is where these platforms make money.

For example, this link will take you to the original 1989 proposal for the World Wide Web. Right now, anyone can create such a link to any other page or object on the web, without having to pay anyone else.

But what Facebook and Google do in curating news content is fundamentally different. They create compelling previews, usually by offering the headline of a news article, sometimes the first few lines, and often the first image extracted.

For instance, here is a preview Google generates when someone searches for Tim Berners-Lee’s Web proposal:

Results page for the Google Search 'tim berners lee www proposal'.
This is a screen capture of the results page for the Google Search: ‘tim berners lee www proposal’.
Google

Evidently, what Google returns is more of a media-rich, detailed preview than a simple link. For Google’s users, this is a much more meaningful preview of the content and better enables them to decide whether they’ll click through to see more.

Another huge challenge for media businesses is that increasing numbers of users are taking headlines and previews at face value, without necessarily reading the article.

This can obviously decrease revenue for news providers, as well as perpetuate misinformation. Indeed, it’s one of the reasons Twitter began asking users to actually read content before retweeting it.

A fairly compelling argument, then, is that Google and Facebook add value for consumers via the reframing, curating and previewing of content — not just by linking to it.

Can the code be fixed?

Currently in the code, the section concerning how platforms are “Making content available” lists three ways content is shared:

  1. content is reproduced on the service
  2. content is linked to
  3. an extract or preview is made available.

Similar terms are used to detail how users might interact with content.

Extract showing the way 'Making content available' is defined in the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020
The News Media and Digital Platforms Mandatory Bargaining Code 2020 outlines three main ways by which platforms make news content available.
Australian Government

If we accept most of the additional value platforms provide to their users is in curating and providing previews of content, then deleting the second element (which just specifies linking to content) would fix Berners-Lee’s concerns.

It would ensure the use of links alone can’t be monetised, as has always been true on the web. Platforms would still need to pay when they present users with extracts or previews of articles, but not when they only link to it.

Since basic links are not the bread and butter of big platforms, this change wouldn’t fundamentally alter the purpose or principle of creating a more level playing field for news businesses and platforms.




Read more:
It’s not ‘fair’ and it won’t work: an argument against the ACCC forcing Google and Facebook to pay for news


In its current form, the News Media and Digital Platforms Mandatory Bargaining Code could put the underlying principles of the world wide web in jeopardy. Tim Berners-Lee is right to raise this point.

But a relatively small tweak to the code would prevent this, It would allow us to focus more on where big platforms actually provide value for users, and where the clearest justification lies in asking them to pay for news content.


For transparency, it should be noted The Conversation has also made a submission to the Senate inquiry regarding the News Media and Digital Platforms Mandatory Bargaining Code.The Conversation

Tama Leaver, Professor of Internet Studies, Curtin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Is news worth a lot or a little? Google and Facebook want to have it both ways


Tim Dwyer, University of Sydney

Executives from Google and Facebook have told a Senate committee they are prepared to take drastic action if Australia’s news media bargaining code, which would force the internet giants to pay news publishers for linking to their sites, comes into force.

Google would have “no real choice” but to cut Australian users off entirely from its flagship search engine, the company’s Australian managing director Mel Silva told the committee. Facebook representatives in turn said they would remove links to news articles from the newsfeed of Australian users if the code came into effect as it currently stands.




Read more:
Expect delays and power plays: Google and Facebook brace as news media bargaining code is set to become law


In response, the Australian government shows no sign of backing down, with Prime Minister Scott Morrison and Treasurer Josh Frydenberg both saying they won’t respond to threats.

So what’s going on here? Are Google and Facebook really prepared to pull services from their Australian users rather than hand over some money to publishers under the bargaining code?

Is news valuable to Facebook and Google?

Facebook claims news is of little real value to its business. It doesn’t make money from news directly, and claims that for an average Australian user less than 5% of their newsfeed is made up of links to Australian news.

But this is hard to square with other information. In 2020, the University of Canberra’s Digital News Report found some 52% of Australians get news via social media, and the number is growing. Facebook also boasts of its investments in news via deals with publishers and new products such as Facebook News.

Google likewise says it makes little money from news, while at the same time investing heavily in news products like News Showcase.

So while links to news may not be direct advertising money-spinners for Facebook or Google, both see the presence of news as an important aspect of audience engagement with their products.

On their own terms

While both companies are prepared to give some money to news publishers, they want to make deals on their own terms. But Google and Facebook are two of the largest and most profitable companies in history – and each holds far more bargaining power than any news publisher. The news media bargaining code sets out to undo this imbalance.

What’s more, Google and Facebook don’t appear to want to accept the unique social role of news, and public interest journalism in particular. Nor do they recognise they might be involved somehow in the decline of the news business over the past decade or two, instead pointing the finger at impersonal shifts in advertising technology.

The media bargaining code being introduced is far too systematic for them to want to accept it. They would rather pick and choose commercial agreements with “genuine commercial consideration”, and not be bound by a one-size-fits-all set of arbitration rules.




Read more:
Changing the rules to control monopolies could see the end of Facebook domination


A history of US monopolies

Google and Facebook dominate web search and social media, respectively, in ways that echo the great US monopolies of the past: rail in the 19th century, then oil and later telecommunications in the 20th. All these industries became fundamental forms of capitalist infrastructure for economic and social development. And all these monopolies required legislation to break them up in the public interest.

It’s unsurprising that the giant ad-tech media platforms don’t want to follow the rules, but they must acknowledge that their great wealth and power come with a moral responsibility to society. Making them face up to that responsibility will require government intervention.

Online pioneers Vint Cerf (now VP and Chief Internet Evangelist at Google) and Tim Berners-Lee (“inventor of the World Wide Web”) have also made submissions to the Senate committee advocating on behalf of the corporations. They made high-minded claims that the code will break the “free and open” internet.




Read more:
Web’s inventor says news media bargaining code could break the internet. He’s right — but there’s a fix


But today’s internet is hardly free and open: for most users “the internet” is huge corporate platforms like Google and Facebook. And those corporations don’t want Australian senators interfering with their business model.

Independent senator Rex Patrick hit the nail on the head when he asked why Google wouldn’t admit the fundamental issue was about revenue, rather than technical detail or questions of principle.

How seriously should we take threats to leave the Australian market?

Google and Facebook are prepared to go along with the Senate committee’s processes, so long as they can modify the arrangement. The don’t want to be seen as uncooperative.

The threat to leave (or as Facebook’s Simon Milner put it, the “explanation” of why they would be forced to do so) is their worst-case scenario. It seems likely they would risk losing significant numbers of users if they did so, or at least having them much less engaged – and hence producing less advertising revenue.

Google has already run small-scale experiments to test removing Australian news from search. This may be a demonstration that the threat to withdraw from Australia is serious, or at least, serious brinkmanship.

People know news is important, that it shapes their interactions with the world – and provides meaning and helps them navigate their lives. So who would Australians blame if Google and Facebook really do follow through? The government or the friendly tech giants they see every day? That’s harder to know.


For transparency, please note The Conversation has also made a submission to the Senate inquiry regarding the News Media and Digital Platforms Mandatory Bargaining Code.The Conversation

Tim Dwyer, Associate Professor, Department of Media and Communications, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Expect delays and power plays: Google and Facebook brace as news media bargaining code is set to become law


Tim Dwyer, University of Sydney

The long-awaited mandatory code that will force Google and Facebook to pay Australian media companies for news content was finally unveiled yesterday.

The Treasury Laws Amendment Bill 2020 (news media and digital platforms mandatory bargaining code) will be introduced to parliament today, before being referred to a Senate committee.

Many of Australia’s news businesses have been on a hiding to nothing for more than a decade, as their revenue is undercut by the targeted advertising business model used by major digital platforms.

The most visible casualty has been public interest journalism — with the prospect of a well-informed citizenry on a slower, less obvious burn.

Against a backdrop of reports suggesting intense lobbying efforts by Facebook and Google against the new legislation, it appears some key concessions have been achieved by the platforms that weren’t present in the draft code.




Read more:
No more negotiating: new rules could finally force Google and Facebook to pay for news


What’s changed in the revised code?

First, the revised code will now abide by an added “two-way value exchange” principle. This allows the monetary worth of traffic sent to news providers to be taken into account when determining the financial value of a particular news business’s content to the platforms.

How this will be calculated, however, will likely be an ongoing bone of contention for both parties.

A second major concession will see Facebook’s Instagram and Google’s YouTube exempted from the application of the new law. But the Treasurer will be able to add these (and other platforms) at a later date, should he deem it justified at the time.

A third concession is the halving of the 28-day notice period for the platforms to warn news websites of major changes to their ranking algorithms. These directly impact how news articles are displayed on Facebook’s Newsfeed and Google Search.

It seems the basic idea to “level the playing field” between platforms and news providers remains baked into the revised code, but only time will tell whether it works in practice.

A figure stands under a Google sign.
Following a year of discussion, Google last month struck a deal with French media in which the tech giant is expected to pay about €150 million (roughly A$245,003,250) over the next three years.
JAE C. HONG/AP

A related objective — to implement a process that sustains public interest journalism — remains equally tricky and may hinge on the revised code’s success.

But many will be pleased the public broadcasters ABC and SBS now fall within the code’s scope, too. Both will be financially compensated for news content along with their commercial rivals.

This may seem like a win, and it may be eventually, but for now it’s unclear how this will actually play out in terms of the government’s ongoing funding of these broadcasters.

Although conjecture at this stage, it may emerge in a forum such as Senate estimates that any compensation payments should be factored into overall funding calculations for the public broadcasters.

The arbitration model

One pivotal feature of the new legislation is it will address the entrenched power of the platforms by introducing a “final offer arbitration” model for price negotiations.

This process, overseen by the Australian Communications and Media Authority, will be mandatory when parties are unable to independently reach an agreement. It will likely be central to the new code’s success, or lack thereof.

Curiously, the revised code’s framework encourages deals to be struck outside of it. In these situations, key elements of commercial negotiations between the parties can be “turned off” with mutual agreement.

This appears to be a pragmatic recognition by the ACCC the code will never be able to control the realities of commercial media deal-making, which continue to be struck despite the code’s new bargaining marketplace.

However, where negotiations break down, news media businesses will be able to trigger the code’s provisions for meeting minimum standards.

This will cover advance notice of algorithmic changes and the requirement to engage in good faith bargaining for up to three months, before participating in the mandatory arbitration process.

Smaller news publishers will be able to bargain collectively, or accept “standard” offers from the platforms.

When one party fails to engage

The code has reasonably strong enforcement provisions in cases where there is a failure to negotiate in good faith, comply with an arbitration decision, avoid participation or engage in “retaliatory action against news media companies”.

The maximum penalty for a breach by Google or Facebook is the greater of either 10% of the platform’s annual Australian turnover, A$10 million, or three times the benefit obtained as a result of hosting the specific news business’s content.

Facebook and Google have put their previous threats to switch off local news content on hold until they see the final version of the code. For now, they appear to be engaging with the ACCC.




Read more:
Facebook vs news: Australia wants to level the playing field, Facebook politely disagrees


We still need to tackle media concentration

As we await the final version of the code, the irony is not lost on those of us also waiting eagerly for events to unfold before another Senate committee on media pluralism.

The committee was set up in response to a petition started by former Prime Minister Kevin Rudd. Amassing more than 500,000 signatures, Rudd’s petition has called for a royal commission into the negative influence of News Corp’s power in Australia’s highly concentrated media landscape.

A rich history of Australia’s parliamentary inquiries into the media indicates we can expect delays, power plays and ongoing lobbying in both these committees. And clearly there will be winners and losers in both.The Conversation

Tim Dwyer, Associate Professor, Department of Media and Communications, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

World is watching plan to make Facebook and Google pay for content: Frydenberg


Michelle Grattan, University of Canberra

The Morrison government will introduce on Wednesday its legislation forcing Google and Facebook to face arbitration if they fail to come to commercial deals with traditional media on payment for content.

The government resorted to the mandatory bargaining code after it was clear agreement wouldn’t be reached for voluntary arrangements on content payment. A voluntary model had been recommended by the Australian Competition and Consumer Commission.

Treasurer Josh Frydenberg told a news conference Tuesday the government wanted the parties to reach deals outside the code. Where agreement could not be reached, the arbitration would kick in.

The ABC and SBS are among the media that will benefit from revenue under the legislation, which won’t be dealt with by parliament until next year.

Communications Minister Paul Fletcher said the ABC had indicated it would devote the revenue it receives to regional journalism. He told Tuesday’s news conference the government would not seek to offset such revenue in its funding for the ABC.

The legislation will set minimum standards for digital platforms including requiring a fortnight’s advance notice of deliberate algorithm changes that have an impact on news media businesses.

The negotiations for payment will need to incorporate the value to providers of the additional eyeballs brought by having their content on the tech platforms.

This provision was put in following consultations on the code with the tech companies. But Frydenberg stressed the money flow was only one way – from the tech companies to the traditional media.

Frydenberg said it was the government’s intention “to ensure that the rules of the digital world mirror the rules of the physical world and ultimately to sustain our media landscape here in Australia”. He described the outcome as fair and balanced.

He said “we live in the age of digital disruption – and nowhere is this more apparent than in our media landscape.” Dollars spent on print advertising had fallen by 75% since 2005; in that time, dollars spent on online advertising increased eightfold.

The application of the code can be extended beyond Facebook NewsFeed and Google Search to other digital platform services if they “give rise to a bargaining power imbalance”. The treasurer has the power to add new services.

Frydenberg said “the word coming back to us is that there are deals that may be struck very soon between the parties”.

He described the scheme as a “world first– and the world is watching what happens here in Australia”.

The Australia Institute’s Centre for Responsible Technology said the legislation was a “globally significant response to the growing power of Big Tech”.

The centre’s director, Peter Lewis, said the move “would give media organisations a fighting chance at building a viable business model, in the face of the market domination of Google and Facebook”.

Lewis called for cross party support for the legislation.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Calls for an ABC-run social network to replace Facebook and Google are misguided. With what money?



shutterstock.

Fiona R Martin, University of Sydney

If Facebook prevented Australian news from being shared on its platform, could the ABC start its own social media service to compensate? While this proposal from the Australia Institute is a worthy one, it’s an impossible ask in the current political climate.

The suggestion is one pillar of the think tank’s new Tech-xit report.

The report canvasses what the Australian government should do if Facebook and Google withdraw their news-related services from Australia, in reaction to the Australian Competition and Consumer Commission’s draft news media bargaining code.

Tech-xit rightly notes the ABC is capable of building social media that doesn’t harvest Australians’ personal data. However, it overlooks the costs and challenges of running a social media service — factors raised in debate over the new code.

Platforms react (badly) to the code

The ACCC’s code is a result of years of research into the effects of platform power on Australian media.

It requires Facebook and Google to negotiate with Australian news businesses about licensing payments for hosting news excerpts, providing access to news user data and information on pending news feed algorithm changes.

Predictably, the tech companies are not happy. They argue they make far less from news than the ACCC estimates, have greater costs and return more benefit to the media.

If the code becomes law, Facebook has threatened to stop Australian users from sharing local or international news. Google notified Australians its free services would become “at risk”, although it later said it would negotiate if the draft law was changed in its favour.

Facebook’s withdrawal, which the Tech-xit report sees as being likely if the law passes, would reduce Australians’ capacity to share vital news about their communities, activities and businesses.




Read more:
If Facebook really pulls news from its Australian sites, we’ll have a much less compelling product


ABC to the rescue?

Cue the ABC then, says Jordan Guiao, the report’s author. Guiao is the former head of social media for both the ABC and SBS, and now works at the institute’s Centre for Responsible Technology.

He argues that, if given the funding, ABC Online could reinvent itself to become a “national social platform connecting everyday Australians”. He says all the service would have to do is add

distinct user profiles, user publishing and content features, group connection features, chat, commenting and interactive discussion capabilities.

As a trusted information source, he proposes the ABC could enable “genuine exchange and influence on decision making” and “provide real value to local communities starved of civic engagement”.

Financial reality check

It’s a bold move to suggest the ABC could start yet another major network when it has just had to cut A$84 million from its budget and lose more than 200 staff.

The institute’s idea is very likely an effort to persuade the Morrison government it should redirect some of that funding back to Aunty, which has a history of digital innovation with ABC Online, iView, Q&A and the like.

However, the government has repeatedly denied it has cut funding to the national broadcaster. It hasn’t provided
catch-up emergency broadcasting funds since the ABC covered our worst ever fire season. This doesn’t bode well for a change of mind on future allocations.

The government also excluded the ABC and SBS as beneficiaries of the news media bargaining code negotiations.

The ABC doesn’t even have access to start-up venture capital the way most social media companies do. According to Crunchbase, Twitter and Reddit — the two most popular news-sharing platforms after Facebook — have raised roughly US$1.5 billion and US$550 million respectively in investment rounds, allowing them to constantly innovate in service delivery.

Operational challenges

In contrast, over the past decade, ABC Online has had to reduce many of the “social” services it once offered. This is largely due to the cost of moderating online communities and managing user participation.

Illustration of person removing a social media post.
Social media content moderation requires an abundance of time, money and human resources.
Shutterstock

First news comments sections were canned, and online communities such as the Four Corners forums and The Drum website were closed.

Last year, the ABC’s flagship site for regional and rural user-created stories, ABC Open, was also shut down.

Even if the government were to inject millions into an “ABC Social”, it’s unlikely the ABC could deal with the problems of finding and removing illegal content at scale.

It’s an issue that still defeats social media platforms and the ABC does not have machine learning expertise or funds for an army of outsourced moderators.

The move would also expose the ABC to accusations it was crowding out private innovation in the platform space.

A future without Facebook

It’s unclear whether Facebook will go ahead with its threat of preventing Australian users from sharing news on its platform, given the difficulties with working out exactly who an Australian user is.

For instance, the Australian public includes dual citizens, temporary residents, international students and business people, and expatriates.

If it does, why burden the ABC with the duty to recreate social media? Facebook’s withdrawal could be a boon for Twitter, Reddit and whatever may come next.

In the meantime, if we restored the ABC’s funding, it could develop more inventive ways to share local news online that can’t be threatened by Facebook and Google.




Read more:
Latest $84 million cuts rip the heart out of the ABC, and our democracy


The Conversation


Fiona R Martin, Associate Professor in Convergent and Online Media, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.