Josh Frydenberg, who as federal treasurer would have enormous discretion over the new legislation, has media ties of his own. In 2016, he was the best man at the wedding of Ryan Stokes, the son of Kerry Stokes, the billionaire owner of Seven West Media, one of the companies that have reached a deal with Google.
In short, it’s no surprise that the Australian government sees America’s tech companies, which have done themselves no favors by trying to sidestep local taxes, as less worthy of support than the dominant national media.
“We’ve got this peculiar symbiotic thing between the news business and the government of the day,” said Jim Minifie, an economist with Lateral Economics, a consulting firm that specializes in digital public policy. “There is a more natural alliance between the center-right government and the news that influences things.”
The legislation being considered includes a code of conduct that would allow media companies to bargain individually or collectively with digital platforms over the value of their news content. The code is intended to address “bargaining power imbalances” between the two sides, partly by forcing disputes into a final arbitration process. It would apply at first only to Facebook and Google, though other digital platforms could be added.
Inside Google’s Australia offices, nearly everything about the law inspires dismay; the process has often been described as a shakedown led by powerful insiders, as if Google were a vulnerable start-up. The frustration goes both ways, with some Australian politicians calling Google’s threat to leave the country little more than blackmail.
But Paul Fletcher, the communications minister, said the Sturm und Drang overlooked the fact that the process began more than three years ago. The proposed code, which was originally designed to be voluntary, has evolved to become mandatory and tougher, he said, because that is what is needed to make the giant platforms pay closer attention to the value of credible information from established outlets.