(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)
After weeks of contentious debate, it appears Australia will be moving forward with its proposed legislation that would force digital platforms to pay for news content linked on their platforms. While some news media companies have cheered this policy, and other countries are hungrily eying similar proposals, it represents an attack on a fundamental principle on which the Internet was built—the freedom to link, without payment and without permission—and the United States should challenge this move vigorously.
Australia’s legislation would implement a mandatory code of conduct developed by the Australian Competition and Consumer Commission (ACCC) that would require digital platforms to negotiate with news publishers over payments for including content on their platforms. If they can’t reach agreement independently, the code would force the parties to enter binding arbitration. The treasurer could designate which platforms must comply with the code—and the Australian government announced that it would initially apply only to Google and Facebook. Any news media business could participate as long as it is primarily engaged in journalism, adheres to certain editorial standards, has editorial independence from the subjects it covers, operates primarily in Australia serving Australian audiences, and has revenue in excess of $150,000. The code also would establish a set of standards for covered platforms, including requiring them to provide advanced notice of changes to how their algorithms rank and present news, identify original news content, and offer information to publishers about how users interact with their content.
There is no logical rationale for this law. Publishers are not forced to give away their content. They are free to monetize their content through advertising or subscriptions. If they do not want users to read their articles for free, they can implement paywalls. At most, news aggregators and search engines display snippets of content, which the courts have reasonably concluded are fair use. If the news publishers do not want news aggregators or search engines to display their content, they can easily delist it. But most don’t. In many cases, it is the publishers who are the ones posting their content to digital platforms and investing in search engine optimization to bring in more readers—a service they enjoy for free, because it is mutually beneficial for the platforms and content creators.
News publishers argue that despite all the benefits they get from these platforms, they still deserve to be paid because the platforms are unfairly freeloading off their content. The publishers argue that without the news publishers, Google and Facebook would have less content, and therefore fewer users, so they should get compensated. Of course, by that logic, every website should get some compensation from search engines and social media sites. Why should news publishers be special? Moreover, why stop at search engines and social media sites? Why not charge any time someone links to another site?
The freedom to link—without payment and without permission—is a critical element of the open Internet. This freedom is what enabled the creation of the early website directories like Yahoo, Lycos, and DMOZ. This freedom is what allows modern search engines to index and link to millions of websites. And this freedom is what allows individuals, from bloggers to social media users, to link to other content, and have others link back to them. It is not hyperbole to say that without the freedom to link there would be no Web.
As with any freedom, there are always limits. Courts have found, for example, that linking to unlawful material may be itself an illegal activity. And the freedom to link still allows digital platforms the freedom to voluntarily enter contracts to license content from news publishers, such as to receive directs feeds from publishers, additional premium content, or to bypass paywalls.
But Australia’s move to mandate that certain businesses must pay others for linking to their content undermines one of the most basic principles of the open Internet. Moreover, if unchecked, other countries are likely to adopt similar policies, seeing it as a good opportunity to extract revenue from American companies.
In the past, the U.S. government has served as fierce advocate of the open Internet. For example, during the Obama administration, Secretary of State Clinton outlined the role of Internet freedom as a key foreign policy goal of the United States and backed up that commitment with both diplomacy and technology. While most of these efforts focused on more repressive regimes—China, Syria, Egypt, Cuba, and Myanmar—there is no reason to turn back now simply because the latest attack on Internet freedom comes from a U.S. ally.
Some U.S. policymakers might hesitate to defend U.S. tech companies, given that its industry leaders have become a popular political target on both sides of the aisle. But this open hostility at home only plays into the hands of critics abroad who would not think twice about destroying some of America’s most successful long-term engines of economic growth if it gave them a short-term boost in revenue. Therefore, the Biden administration should directly confront Australia on its legislation through all available diplomatic and trade channels, and insist that Australia either retract this policy or pay a heavy price.
Overlooking this now would not only hurt U.S. businesses, but also damage one of the core principles of the open Internet.