Europe ready to tighten big-tech rules

European Union lawmakers could be poised to follow Australia's lead and make big tech companies such as Facebook and Google pay for news.

Legislation introduced in Australia before Christmas will soon become law, following the discovery by the country's competition watchdog that for every 100 Australian dollars ($77.26) spent by advertisers online in 2019, Google received A$53, Facebook got A$28 and just A$19 ended up going to other websites or advertising tech.

Now members of the European Parliament are working on draft proposals looking to bring in similar reforms, known as the Digital Services Act (DSA) and the Digital Markets Act (DMA).

"With their dominant market position in search, social media and advertising, large digital platforms create power imbalances and benefit significantly from news content," said Maltese MEP Alex Saliba, who was involved in the first DSA report. "I think it is only fair that they pay back a fair amount."

When the DSA proposal was published by the European Commission in December last year, its message was clear.

"The landscape of digital services is significantly different today from 20 years ago, when the eCommerce Directive was adopted. Online intermediaries have become vital players in the digital transformation … some very large players have emerged as quasi-public spaces for information sharing and online trade. They have become systemic in nature and pose particular risks for users' rights, information flows and public participation," it said.

In the Australian dispute, Google even threatened to pull its services from the country, where CNBC reports it holds 94.5 percent market share, and Facebook said users could soon be forbidden from sharing local and international news on its platforms and Instagram. However, Australia's communications minister Paul Fletcher said the country had seen similar threats from United States-owned tech companies in the past, which were later withdrawn.

Despite disagreement over how best to do it, there seems to be a desire for change among MEPs. In 2019, EU copyright law was altered to ensure content publishers were entitled to compensation for online platform use of their material, but some lawmakers want these rules tightened up.

"The idea of the copyright directive was to create a stronger negotiating position for news publishers," said Estonian MEP Andrus Ansip.

"We now know that the same process is going on in Australia. I don't want to reopen the copyright directive but we will have to (look at the DSA) if we need to bring more clarity.

"We will never accept this situation when somebody is using content.. . and authors are not remunerated at all."

Google said it was keen to help find a solution.

"People trust Google to help them find relevant and reliable information from a range of websites, and this helps publishers by sending them valuable traffic to their sites," said a statement.

"We are willing to pay to further support journalism and we are doing that around the world."