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Google, taxes, journalism, and fair play

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pietillidie 



Joined: 07 Jan 2005


PostPosted: Tue Feb 23, 2021 6:45 am
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David wrote:
I must confess to being confused by your argument – it sounds like you agree with the outcome but not the process, even though a different process that "plays by the rules" (i.e. taxing Facebook, which, c.f. Tannin's post above, hasn't exactly been going swimmingly so far) would probably ... not have anything like the desired outcome at all.

Perhaps you're right that the government simply hasn't tried hard enough to get Facebook to pay what it actually owes. But my suspicion is that they couldn't no matter how hard they tried, and that they know that. Governments of all ideological stripes talk big about cracking down on tax havens from time to time, but they ultimately can't do much about it because it's an international problem, and the international appetite to sort this stuff out is lacking.

There's nothing confusing about it. We're always seeking principles for stability, and making exceptions if left without choice. But the onus is on you to prove there's no choice. I think we're just pathetically lazy; when's the last person or leftist you saw winning Facebook likes for saying that taxation is one of the pillars of complex civilisation, which plainly it is? As I say, no selfie glory in that. Better to strip naked and save a pig than defend foundational civilisational norms, apparently.

Where long-term stability and planning are concerned in a society, it's all about good/due/proper/fair/legal process. The opposite you're advocating is infinitely more problematic. One is principle/agreement/rule-based, no matter how flawed, and the other is a gust of arbitrary populist wind, that changes with each villain; a perpetual Trumpian nightmare. It's not called 'death and taxes' because everyone else is wrong and you've miraculously discovered a way around them.

Like so much hot air we expel for no good purpose, this sort of special pleading to avoid the taxation problem is just misdirection from the single critical point of failure. So, instead of misdirecting the audience yet again for another futile tour of circumventing the actual problem, why not apply your brain and energy to solving it? Most problems worth solving are hard. (And you can thank dim-witted Lexiters, their far-right fist-waving analogues, and rusted on elderly nationalists in the shires for helping scupper the best chance in history, after decades of effort, for widespread agreement on cross-jurisdictional taxation).

David wrote:
pietillidie wrote:
All tax on sharing and accessing content will do is create sites that publish content freely, allowing sharing on Facebook free of charge. If that's all their heart's desired, it would actually kill them off the old school robber barons. Then, you'll have hunt the free content sites down for undermining 'real' journalism by 'colluding' with the big tech firms, even as the Murdochs of the world start walling off the internet, slicing it into service tiers, and dividing access into licenced regions.

This seems far-fetched to me. Is there any evidence of anything like this happening? If it were, one might expect Facebook to already adopt a divide-and-conquer tactic that goes after the Murdoch papers et al while letting their cheapskate competitors in the blogosphere and elsewhere – plenty of whom fit your description and already exist – survive, but their scorched-earth response suggests that they have something different in mind.


I don't mean Murdoch will give content away, I mean it will create an automatic market for people to create free news sites to fill the void, thus killing Murdoch off. In like five minutes flat. Brilliant, you say! But not so fast, because the old media barons are also trying to commandeer the web itself to put a stop to that.

These are conmen and their product is dated, rubbish and lacks competitive advantage. They can only sell it by manipulating the system to funnel people helplessly into their net. You might think Facebook's bad, but the Murdochesque scheme is also about controlling the open highways and byways.

David wrote:
pietillidie wrote:
If that sounds familiar it's because your experiment has already been run. For decades. And yes, even at your new inflated prices, you still end up with the same rubbish being delivered to the same market that cares so little about information that prior to its Facebook News addiction it watched Fox News and read The News of the World.

Yes, some "journalism" is appalling quality-wise – that's always been the case, and always will be the case in any economy. But I trust that we all understand that good, essential journalism does exist out there, and that throwing the baby (the ABC, The Guardian, sometimes Fairfax and some of the smaller providers like Crikey) out with the bathwater would have a catastrophic impact on our ability to hold governments to account and actually understand what it is we're voting for and what comes of it. But these publications are struggling for survival as much if not more than the News Corp tabloids, so I don't understand why people keep talking about this as if it's just Murdoch vs Facebook. I mean, think of the ex-Fairfax papers in isolation: they're absolutely on their knees, and when they finally die, the only city-specific major news publications in existence – yes, online as well as in print – will be the Murdoch tabloids and the more or less ideologically identical West Australian in Perth. The notion that we shouldn't give them a hand via some sort of industry-wide bail-out because it might also help Murdoch is pretty bizarre logic.

See above, you don't understand the scheme. People buy something like the Fin Times (or even Murdoch's WSJ) because they have a reason to; not only is the quality exceptional, as readers they make money from being better informed and get smarter by reading smart people, and they know it. Few people are going to keep paying for Murdoch's rubbish when the rubbish on the internet is more fun, which is the real reason Fox News is declining. See solution below.

David wrote:
One more thing: I don't see how you can have a blanket opposition to protectionism and yet support something like the ABC. How is that not, at its heart, a protectionist concept? It's certainly anathema to the most ardent free trade proponents like the IPA. So I would have thought the most sensible position remains a little from each column, and that simply leaving this to the market to resolve is a recipe for disaster.

As explained, it's not 'protection', it's arbitrary Trumpesque fist-waving interference. On the other hand, public services are public services. I'm not opposed to the provision of any of what I deem minimal societal settings ('the cost of minimal universal participation'), from healthcare and education to information provision (including quality internet access), and my minimum is much higher than what exists now, believe me.

Nope, do it properly or not at all, as inglorious and difficult as collecting and implementing taxes might be. Let Facebook face proper prosecution for its giant litany of failures and/or outright breaches, rather than undermine the common good, including one of the fundamental premises of the internet itself, just to get at it, and let those who keep shielding Facebook from facing that music answer for it.

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David Libra

I dare you to try


Joined: 27 Jul 2003
Location: Andromeda

PostPosted: Tue Feb 23, 2021 3:45 pm
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"Properly" seems to be a highly subjective concept here. As tempting as it might be, I'm not advocating breaking into the safes in Facebook Australia's head office and distributing its holdings to the poor; what's happening here seems to me a legal and above-board arbitration process, akin to setting up something like the Fair Work Commission. Of course one is entitled to argue that this sort of publisher / tech platform relationship shouldn't ever be the subject of state intervention, but it seems to me that one man's Trumpesque fist-waving is another man's sensible regulation – and it's worth noting that Trump himself, bound to certain party ideologies as he was, never lifted a finger to help news outlets, nor to rein in the tech behemoths. It seems that those who follow in our wake won't be the world's autocrats and populist rabble-rousers, but rather the more sensible social democracies like Canada, which I think ought to tell you a little more about what kind of policy this is:

https://www.dw.com/en/australia-commits-to-media-law-despite-facebook-news-ban-canada-to-follow/a-56621509

Anyway, it seems that some of the rougher edges of the legislation have been worn off, and Facebook is backing down from their news ban:

https://www.theguardian.com/australia-news/live/2021/feb/23/australia-news-live-albanese-covid-jab-vaccine-morrison-pressure-higgins-claim

Quote:
From Josh Frydenberg’s office:

The Morrison Government will today introduce further amendments to the News Media and Digital Platforms Mandatory Bargaining Code.

These amendments will provide further clarity to digital platforms and news media businesses about the way the Code is intended to operate and strengthen the framework for ensuring news media businesses are fairly remunerated. These amendments will make it clear that:

• a decision to designate a platform under the Code must take into account whether a digital platform has made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements with news media businesses;

• a digital platform will be notified of the Government’s intention to designate prior to any final decision – noting that a final decision on whether or not to designate a digital platform would be made no sooner than one month from the date of notification;

• non-differentiation provisions will not be triggered because commercial agreements resulted in different remuneration amounts or commercial outcomes that arose in the course of usual business practices; and

• final offer arbitration is a last resort where commercial deals cannot be reached by requiring mediation, in good faith, to occur prior to arbitration for no longer than two months.

Importantly, the amendments will strengthen the hand of regional and small publishers in obtaining appropriate remuneration for the use of their content by the digital platforms.

The Explanatory Memorandum will confirm that the Code only applies to the extent a digital platform is making covered news content available through those services.

These amendments also add further impetus for parties to engage in commercial negotiations outside the Code – a central feature of the framework that the Government is putting in place to foster more sustainable public interest journalism in Australia.

The Government has been advised by Facebook that it intends to restore Australian news pages in the coming days.

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stui magpie Gemini

Prepare for the worst, hope for the best.


Joined: 03 May 2005
Location: In flagrante delicto

PostPosted: Tue Feb 23, 2021 4:28 pm
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It will be interesting to see how much they negotiate to pay with News corp then. $20-30 Mil might be nice but hardly life changing for them.

Quote:
Rupert Murdoch’s News Corp has pledged to keep a lid on costs after posting its most profitable quarter in at least seven years thanks to a stronger than expected performance from its pay-TV business Foxtel.

News Corp generated a $US261 million ($343 million) profit for the December quarter. Earnings before interest, tax, depreciation and amortisation were $US497 million. Chief executive Robert Thompson said it was the strongest quarterly result since the publishing and digital media company was split from the Murdoch family’s US entertainment assets in 2013.


So that's up around $1B profit per year.

Quote:
Revenue fell 2 per cent to $US2.4 billion ($3.2 billion) due to weak print advertising conditions and the divestment of a marketing business.


Of course revenue from print is declining, that's nothing to do with Facebook.

https://www.smh.com.au/business/companies/news-corp-reports-most-profitable-quarter-in-seven-years-20210205-p56zsg.html

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David Libra

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Joined: 27 Jul 2003
Location: Andromeda

PostPosted: Tue Feb 23, 2021 4:36 pm
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I'm not sure if I'd say it's got nothing to do with Facebook – if it were a 1:1 transition from print to news sites, that would be one thing, but isn't the key point in all this that advertising has been migrating away from those publishers and instead being diverted to big platforms like Facebook and Google?
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Tannin Capricorn

Can't remember


Joined: 06 Aug 2006
Location: Huon Valley Tasmania

PostPosted: Tue Feb 23, 2021 5:02 pm
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And in news just in, Facebook has caved.

Well played, Federal Government. Score: People of Australia 1, Facebook nil. That's a win in any language.

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eddiesmith Taurus

Lets get ready to Rumble


Joined: 23 Nov 2004
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PostPosted: Tue Feb 23, 2021 5:45 pm
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Yet elsewhere people with an axe to grind are saying the Federal Government caved!!!

No surprise it ended quickly
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Tannin Capricorn

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Joined: 06 Aug 2006
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PostPosted: Tue Feb 23, 2021 5:56 pm
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Facebook is now going to pay for the news is publishes. That is a win for Australia all day long. Facebook caved.
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stui magpie Gemini

Prepare for the worst, hope for the best.


Joined: 03 May 2005
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PostPosted: Tue Feb 23, 2021 6:13 pm
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Facebook clearly saw the writing on the wall and yes, they caved.

The government introduced some changes to the legislation to make it less unpalatable for Facebook to cave.

The world was watching and Facebook knew that whatever happened here would form the precedent.

I'm still very unconvinced at the justification for this, it strikes me as saying to a company that they've been too successful, you can afford to subsidise the media companies that shamelessly use your platform to market themselves and claim you should pay them for this.

But, well done Scomo, Frydenberg et al, there would have been a lot of negotiation going on in private.

And well done to Tannin, I'm sure it wouldn't sit well giving praise to the Morrison government for anything, but on this point your ideals and there's alligned and you weren't too stubborn or biased to admit it and give credit where due.

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eddiesmith Taurus

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PostPosted: Tue Feb 23, 2021 6:22 pm
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Tannin wrote:
Facebook is now going to pay for the news is publishes. That is a win for Australia all day long. Facebook caved.


Cheers, good result then
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stui magpie Gemini

Prepare for the worst, hope for the best.


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PostPosted: Tue Feb 23, 2021 6:28 pm
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David wrote:
I'm not sure if I'd say it's got nothing to do with Facebook – if it were a 1:1 transition from print to news sites, that would be one thing, but isn't the key point in all this that advertising has been migrating away from those publishers and instead being diverted to big platforms like Facebook and Google?


The ROI on print adverts was ridiculous. As people stopped buying papers and started consuming their news online, they struggled (and still are) with balancing providing value for money to advertisers with pissing off consumers with invasive ads.

Google and Facebook hit the sweet spot for making adverts unobtrusive while still getting results. Pretty much every company that pays for advertising has a limit to it's budget and wants to maximise ROI. Facebook and Google were smarter and better investments.

In breaking news, 7 West media is the first company in Australia to reach an agreement with Facebook for News.

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pietillidie 



Joined: 07 Jan 2005


PostPosted: Wed Feb 24, 2021 7:11 am
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Are you all really telling me the government is forcing companies to negotiate with each other to reach a deal it's too cowardly to mandate through proper anti-competition and taxation policy and this is good?

If people are sharing illegally, sue the person and/or the platform. If the platform is controlling prices, apply competition law. If the platform is endangering people, apply whatever law. And so on. It's as if you've suddenly declared: "Well, all that law business is too hard and there's no votes in it anyway. Plus I hate the bastards".

I don't get what people like about this. I am no fan at all of FB and MZ by any means, and hate the platform, but you can't abandon proper law, policy and governance for random interference, surely.

Have you thought about the policy arbitrage that will follow? What are the precedents being set here? And how exactly will putting failing news on life support improve your news? What about the implications for the internet? Who should get this enforced windfall and who shouldn't, and why? All this will do from what I can tell is delay adaptation, like Trump's failed coal industry plan.

There must be an internal Aussie thing going on that I'm not getting, because you all seem happy about it but it's neither good market practice nor good governance, whatever one's political stripe Confused

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Tannin Capricorn

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PostPosted: Wed Feb 24, 2021 9:12 am
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Not even slightly an "internal Aussie thing". Canada is already moving in the same direction (as per an announcement by the relevant minister). So is India. And the EU are certain to take broadly similar action.

Meanwhile, in the UK Uber just lost a major court case and are going to have to treat employees as though they were .. well ... employees. That is expected to have a knock-on effect in other countries.

Little by little, we are seeing the digital robber barons of the new age being made responsible for their actions, and made to comply with the law. It's not much, but it's a start.

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pietillidie 



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PostPosted: Wed Feb 24, 2021 9:34 am
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^But what law is being applied here by what authority? It's hard to find good info on the details.
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Tannin Capricorn

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PostPosted: Wed Feb 24, 2021 10:50 am
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Competition law. It has been in place for many years. From memory, it was the Hawke/Keating government's work, but it has stood more-or-less unaltered through the Howard, Rudd, Gillard, Abbott, Turnbull and Morrison regimes too.

Essentially the government has said to Facebook and Google "There are anti-monopoly laws in the is country, you know, and you are breaking them. The relevant acts specifically outlaw abusing a position of unfair market power. Now you can get your act together and play nice, or you can face the consequences. Your call."

(Whether the current government would have instructed its competition regulators to get serious and start the long-drawn-out and very expensive process of prosecution under competition law, or simply brought in new legislation to get straight to the point, I don't know. The reality is that Facebook and Google (eventually) recognised that they are subject to law and not above it, and they caved.)

(My suspicion is that the current government wold have preferred new special-purpose legislation, because if they got serious about enforcing the existing laws about abuse of market power, sure, Google and Facebook would get hammered, but so would Coles, Woolworths, Bunnings, and one or two others. They (the Liberals) don't want that. The supermarkets only screw over consumers and suppliers, not anyone that matters.)

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pietillidie 



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PostPosted: Wed Feb 24, 2021 11:35 am
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Having just read some of the legislation and a few of the submissions, this is clearly miles above most people's heads.

What makes everyone so sure the negotiations won't simply create a rigged market relationship between dominant news suppliers and platforms, all of which pay virtually no tax including News Corp and Fairfax, locking out thriving independent news businesses in return for more concentrated opinion, but no more government revenue and news quality? And if search companies are paying to link something, why should they care about the links of those who are not paying?

This is a very, very poorly understood change by virtually everyone. It's got a Brexit-level lack of understanding about it and it's backed by a similarly motley crew of shabby chancers right and left. Forgive me if I remain extremely sceptical until convinced otherwise. Like any change the result might be good, might, but people are clearly just guessing.

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Last edited by pietillidie on Wed Feb 24, 2021 12:14 pm; edited 2 times in total
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