Blame the Internet, Not Online News Aggregators

Abstract

“Facebook is not compatible with democracy,” declared Representative David Cicilline (D-R.I.) on Twitter. One might think that the Congressman was announcing the results of an investigation into the 2016 election when making that claim. Not so—the Congressman’s tweet was a reaction to Facebook’s decision to halt the sharing of news on its platform in Australia. According to Representative Cicilline, Facebook’s decision to forego carrying news links on its website to avoid paying a new tax to publishers was the equivalent of “bring[ing] an entire country to its knees.” Really?

Australia’s link tax is one of many recent policy proposals that places online news aggregators such as Facebook in their crosshairs. In the quest to take on “Big Tech,” legislators and regulators have armed themselves with privacy law, antitrust law, copyright law, and, in a few states, even the Constitution. Moves to reduce the influence of technology platforms on the news require us to take a step back and consider whether we have accurately identified the causes of the challenges faced by the news media. Absent a clear-eyed understanding of the forces at play, any so-called solutions will surely miss the mark.

This essay argues that is exactly what is happening. The real problem for news publishers is the internet itself, not online news aggregation. If anything, online news aggregation is a force that works in favor of news publishers by driving traffic to them that they can monetize through advertising, subscriptions, or both. Once that is understood, it becomes clear that current policy proposals that intend to force online aggregators to pay publishers to link to their content fail to grasp the economic relationship between news aggregators and news platforms and are ultimately counterproductive.