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?
Is there any merit to this at all?
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?
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
It's a super dumb idea that will never go anywhere.
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.
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
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.
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.