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I don't understand. If they wanted to tax it for the government / social programs it would sort of make sense. But why distribute it to old media companies? Is

I don't understand. If they wanted to tax it for the government / social programs it would sort of make sense. But why distribute it to old media companies? Is there any merit to this at all?

jay_kyburz 6y ago
I think the point is, if somebody shares a link to an article of Sydney Morning Herald on Facebook, and Facebook runs an ad along side the article, that the SMH should get some of profit from the ad. It's a super dumb idea that will never go anywhere.
- wutbrodo 6y ago
  I know you're not defending it, but even this steelman doesn't make sense. They don't run an ad alongside the article; They run it alongside the _link_ to the article, and the Sydney Morning-Herald runs an ad alongside the article. Facebook is providing aggregation and sharing of the link, and advertising alongside that aggregation and sharing. Does the Aus gov't think that telecoms or smartphone manufacturers should be paying extortion money to media companies too?
  - cormacrelf 6y ago
    I can't back any of this up, but I think this is the logic. Facebook is essentially a link distribution platform. It only continues to get visitors because media companies keep providing, like spooky magic, new links to be shared on there every day. Many of their visitors would drop away immediately without news. The news is the basis for a ton of engagement once the visitors arrive (39.2K likes, etc.). If that were all true you'd think it would be enough to get Facebook to pay to keep news companies afloat, but it isn't: they don't care which news organisations survive, only that there are still new links every day. Importantly, because nobody reads articles, only headlines, news orgs get nothing without the click. So "link aggregation" without ad revenue or subscription revenue is worth zero in the usual case. Fb doesn't have a problem letting good journalism die out as long as there are enough Breitbarts going around producing engagement on Fb. It takes a lot less $ per link to produce fake news than real news with facts in it, and those headlines are pretty damn engaging, so those places will die out last or more likely never die out because the margins are still fine and their competitors have died out. I think that means they have to pay fake news places as well, otherwise promoting quality news (Fb can control how much attention a link gets) costs more tax and is disincentivised.
  - dodobirdlord 6y ago
    Facebook will display a link preview in the news feed, which will generally select some thumbnail and show the article headline and some text snippet, maybe the first sentence or two. The argument goes that by doing this, Facebook is monetizing the content of the link owner, and if people only read the headlines and text snippets and never click the link (frequently true), Facebook ends up with all of the ad revenue. At least, this is the argument used by Spain against Google News, causing Google to stop linking to Spanish news sites. https://louisem.com/3838/facebook-link-thumbnail-image-sizes https://louisem.com/3838/facebook-link-thumbnail-image-sizes
    - wutbrodo 6y ago
      > if people only read the headlines and text snippets and never click the link (frequently true), Facebook ends up with all of the ad revenue. No, you have this backwards; snippets don't leech revenue away from news orgs, they enhance their revenue. There have been cases in the past where Google was ordered to stop displaying snippets of certain sites without paying, and media companies immediately started whining about the sharp traffic declines. Complaints about the copyright of snippets is a fig leaf for protection money of the sort they're demanding once again.
polemic 6y ago
Read the article, it's not for social programmes.
- Panini_Jones 6y ago
  That's what their comment said.
seemslegit 6y ago
Because "old media companies" are Rupert Murdoch, who does in real life what George Soros is accused of doing by media outlets controlled by... Rupert Murdoch.
wutbrodo 6y ago
Frankly, it's just another case of the non-US developed world deciding that demanding extortion money is better than trying to innovate and create value for the world. The US economy has plenty of pathologies and plenty of things to learn from the rest of the OECD, but stuff like this is the flipside. I thought this was mostly Europe's wheelhouse, but apparently it's broader than that.
- tikkabhuna 6y ago
  Tariffs and such have been used to even the playing field though. When scalability and network effects are strong how would a company in Australia compete with the existing players who can structure themselves to pay extremely little tax. If US tech companies want to generate profit from EU and other OECD countries why shouldn't they be taxed in the countries they generate that money from?
  - wutbrodo 6y ago
    I'm not a big fan of tariffs in general, and think there are usually better policy tools to achieve the same objective, but they have their place: there are sound reasons to want to retain domestic production capacity in certain industries, while still taking advantage of the efficiency that full nationalization often precludes. It's not entirely unreasonable to include domestic media in this category either. But this set of demands goes far beyond what's required to protect critical domestic production, by explicitly laying out specifics for how the market should be structured: > require the companies to negotiate in good faith on how to pay news media for use of their content, advise news media in advance of algorithm changes that would affect content rankings, favour original source news content in search page results, and share data with media companies. On top of that, the doublespeak about the purpose of demands like these rankle me: > Frydenberg said it was only fair that media companies that created the content got paid for it. “This will help to create a level playing field,” he said. Paywalls have existed for ages. The notion that "it's only fair" that a business that chooses a business model based on ad revenue also get a government-coerced payout from a third-party is lunatic on its face. Aggregators and referrers like Google and Facebook don't create content[0] and thus aren't eating media companies' lunch; competitors like blogs are. If it's "not fair" that they're paid, why not fund them directly out of the government? > If US tech companies want to generate profit from EU and other OECD countries why shouldn't they be taxed in the countries they generate that money from? Are you under the impression that their profits within the country aren't already taxed? The difference here is that the tax receipts are going directly to media companies instead of to the gov't (and the fact that implicit taxes generally don't manage to capture the attention of the uninformed voter, who'd probably be put off by the idea that a tax should be have such narrowly-targeted payers and recipients without being explicitly Pigovian (Eg cigarettes)). [0] Except to the extent that individual posts on Facebook have reduced news consumption, but I'm not sure if that's true
tensor 6y ago
The old media companies business model collapsed (newspapers). So they are essentially turning the old media companies into public companies, but instead of using tax dollars they are arbitrarily punishing Google and Facebook because they have a lot of money.
- Nasrudith 6y ago
  It is far worse than that. If they did a 'bailout and buy up' of failing companies. Instead it is still for private profit and receiving an arbitrary punishment to try to enrich private parties. Which is so damn very corrupt by definition.
thu2111 6y ago
Because politicians believe, probably correctly, that journalists decide elections. When journalists come knocking for favours they get them. It's the same story in Germany, France, Spain etc. Less so in the UK where newspapers are more diverse and have mostly either gone paywalled and stabilised, or have such huge popularity and reach (e.g. Daily Mail) that they can be profitable off of traffic and ads. But most countries have a lot of newspapers all hard to differentiate from each other due to journalistic groupthink. They can't/won't compete by altering the way they report news, so they are reduced to calling in favours in capital cities.

I don't understand. If they wanted to tax it for the government / social programs it would sort of make sense. But why distribute it to old media companies? Is there any merit to this at all?

jay_kyburz 6y ago

I think the point is, if somebody shares a link to an article of Sydney Morning Herald on Facebook, and Facebook runs an ad along side the article, that the SMH should get some of profit from the ad. It's a super dumb idea that will never go anywhere.

wutbrodo 6y ago
I know you're not defending it, but even this steelman doesn't make sense. They don't run an ad alongside the article; They run it alongside the _link_ to the article, and the Sydney Morning-Herald runs an ad alongside the article. Facebook is providing aggregation and sharing of the link, and advertising alongside that aggregation and sharing. Does the Aus gov't think that telecoms or smartphone manufacturers should be paying extortion money to media companies too?
- cormacrelf 6y ago
  I can't back any of this up, but I think this is the logic. Facebook is essentially a link distribution platform. It only continues to get visitors because media companies keep providing, like spooky magic, new links to be shared on there every day. Many of their visitors would drop away immediately without news. The news is the basis for a ton of engagement once the visitors arrive (39.2K likes, etc.). If that were all true you'd think it would be enough to get Facebook to pay to keep news companies afloat, but it isn't: they don't care which news organisations survive, only that there are still new links every day. Importantly, because nobody reads articles, only headlines, news orgs get nothing without the click. So "link aggregation" without ad revenue or subscription revenue is worth zero in the usual case. Fb doesn't have a problem letting good journalism die out as long as there are enough Breitbarts going around producing engagement on Fb. It takes a lot less $ per link to produce fake news than real news with facts in it, and those headlines are pretty damn engaging, so those places will die out last or more likely never die out because the margins are still fine and their competitors have died out. I think that means they have to pay fake news places as well, otherwise promoting quality news (Fb can control how much attention a link gets) costs more tax and is disincentivised.
- dodobirdlord 6y ago
  Facebook will display a link preview in the news feed, which will generally select some thumbnail and show the article headline and some text snippet, maybe the first sentence or two. The argument goes that by doing this, Facebook is monetizing the content of the link owner, and if people only read the headlines and text snippets and never click the link (frequently true), Facebook ends up with all of the ad revenue. At least, this is the argument used by Spain against Google News, causing Google to stop linking to Spanish news sites. https://louisem.com/3838/facebook-link-thumbnail-image-sizes https://louisem.com/3838/facebook-link-thumbnail-image-sizes
  - wutbrodo 6y ago
    > if people only read the headlines and text snippets and never click the link (frequently true), Facebook ends up with all of the ad revenue. No, you have this backwards; snippets don't leech revenue away from news orgs, they enhance their revenue. There have been cases in the past where Google was ordered to stop displaying snippets of certain sites without paying, and media companies immediately started whining about the sharp traffic declines. Complaints about the copyright of snippets is a fig leaf for protection money of the sort they're demanding once again.

polemic 6y ago

Read the article, it's not for social programmes.

Panini_Jones 6y ago
That's what their comment said.

seemslegit 6y ago

Because "old media companies" are Rupert Murdoch, who does in real life what George Soros is accused of doing by media outlets controlled by... Rupert Murdoch.

wutbrodo 6y ago

Frankly, it's just another case of the non-US developed world deciding that demanding extortion money is better than trying to innovate and create value for the world. The US economy has plenty of pathologies and plenty of things to learn from the rest of the OECD, but stuff like this is the flipside. I thought this was mostly Europe's wheelhouse, but apparently it's broader than that.

tikkabhuna 6y ago
Tariffs and such have been used to even the playing field though. When scalability and network effects are strong how would a company in Australia compete with the existing players who can structure themselves to pay extremely little tax. If US tech companies want to generate profit from EU and other OECD countries why shouldn't they be taxed in the countries they generate that money from?
- wutbrodo 6y ago
  I'm not a big fan of tariffs in general, and think there are usually better policy tools to achieve the same objective, but they have their place: there are sound reasons to want to retain domestic production capacity in certain industries, while still taking advantage of the efficiency that full nationalization often precludes. It's not entirely unreasonable to include domestic media in this category either. But this set of demands goes far beyond what's required to protect critical domestic production, by explicitly laying out specifics for how the market should be structured: > require the companies to negotiate in good faith on how to pay news media for use of their content, advise news media in advance of algorithm changes that would affect content rankings, favour original source news content in search page results, and share data with media companies. On top of that, the doublespeak about the purpose of demands like these rankle me: > Frydenberg said it was only fair that media companies that created the content got paid for it. “This will help to create a level playing field,” he said. Paywalls have existed for ages. The notion that "it's only fair" that a business that chooses a business model based on ad revenue also get a government-coerced payout from a third-party is lunatic on its face. Aggregators and referrers like Google and Facebook don't create content[0] and thus aren't eating media companies' lunch; competitors like blogs are. If it's "not fair" that they're paid, why not fund them directly out of the government? > If US tech companies want to generate profit from EU and other OECD countries why shouldn't they be taxed in the countries they generate that money from? Are you under the impression that their profits within the country aren't already taxed? The difference here is that the tax receipts are going directly to media companies instead of to the gov't (and the fact that implicit taxes generally don't manage to capture the attention of the uninformed voter, who'd probably be put off by the idea that a tax should be have such narrowly-targeted payers and recipients without being explicitly Pigovian (Eg cigarettes)). [0] Except to the extent that individual posts on Facebook have reduced news consumption, but I'm not sure if that's true

tensor 6y ago

The old media companies business model collapsed (newspapers). So they are essentially turning the old media companies into public companies, but instead of using tax dollars they are arbitrarily punishing Google and Facebook because they have a lot of money.

Nasrudith 6y ago
It is far worse than that. If they did a 'bailout and buy up' of failing companies. Instead it is still for private profit and receiving an arbitrary punishment to try to enrich private parties. Which is so damn very corrupt by definition.

thu2111 6y ago

Because politicians believe, probably correctly, that journalists decide elections. When journalists come knocking for favours they get them. It's the same story in Germany, France, Spain etc. Less so in the UK where newspapers are more diverse and have mostly either gone paywalled and stabilised, or have such huge popularity and reach (e.g. Daily Mail) that they can be profitable off of traffic and ads. But most countries have a lot of newspapers all hard to differentiate from each other due to journalistic groupthink. They can't/won't compete by altering the way they report news, so they are reduced to calling in favours in capital cities.