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Senator Nick Xenophon at the Select Committee on Future of Public Interest Journalism hearing in Sydney.

A Senate select committee holding hearings into the crisis in public interest journalism – that has seen over 3,000 news workers lose their jobs in the last five years – has Google and Facebook in its sights. Political editor Dr Martin Hirst reports.

SENATOR Nick Xenophon dropped a bombshell in the Senate Select Committee: Future of Public Interest Journalism hearing, in Sydney, yesterday.

The South Australian Independent Senator accused Google Australia of abusing its market position and bullying some news organisations into accepting onerous terms for inclusion in elevated Google search results.

Google Australia Managing Director Jason Pellegrino immediately refuted the allegation, but that did not stop Senator Xenophon from giving the global search engine giant a hard time, akin to a courtroom cross examination.

The exchange centred around a controversial Google policy that encourages news publishers to provide a "first click for free" process, whereby consumers searching for content using Google get a peek behind any paywall that’s in place when they click the search engine link.

Senator Xenophon would not reveal the source of the allegation, but he put it forcefully to Mr Pellegrino in the following terms:

XENOPHON: Publishers received a phone call from a Google executive to say that we [Google] demand that you adopt the first click for free changes … and essentially telling publishers that "if you don’t comply with Google’s new compliance standards … your website will be placed lower in the search results".... That must be a classic case of the abuse of market power in my view.

PELLEGRINO: Senator, I’m not aware of those conversations and I’ve been working for Google in Australia for ten years and I have constant, ongoing conversations with all publishers… I haven’t seen or heard or been aware of any conversation like that.

XENOPHON: [Cutting in.] You’re abusing your market power. Let me just give you an example…

PELLEGRINO: [Cutting in.] Senator, with respect, I have to respectfully disagree with that statement.

XENOPHON: Well, you have an enormous amount of market power and you basically tell publishers: "If you don’t come along with our first click for free policy, you’ll be ranked lower."

PELLEGRINO: Publishers have choice in the options they choose.

XENOPHON: You’ve got a monopoly of search engines in this country.

Listen to the exchange here:

The exchange stalled at this point and Senator Xenophon got sidetracked with another question — probably to the relief of the Google executives.

However, the exchange highlighted the general tone of questions to Google from Senators Xenophon and Lisa Singh (ALP). There was frustration on both sides and the tension in the room was noticeable to anyone watching.

Advertising and media industry consultant Denise Shrivell told IA that both Facebook and Google faced some hostile questions — particularly about their business models and efforts they were taking to address the issue of "fake news" being shared and promoted across their platforms.

Listen to IA's interview with Denise Shrivell here:

Who will pay for public interest journalism?

One of the terms of reference for this inquiry is into the impact of search engines and social platforms like Facebook on the availability of public interest journalism and the viability of the legacy business models in the mainstream media.

There is widespread agreement that somehow Google and Facebook have to shoulder some responsibility for the loss of journalist jobs in Australia. This agreement is evident among most of the interested parties who have made submissions or given evidence before the Senate Select Committee.

However, as Denise Shrivell notes, this focus on Google and Facebook as the villains has taken attention away from the main news providers — particularly News Corp and Fairfax Media. Their own poor business decisions over the last ten to 20 years have also been at least partially responsible for their decline.

It is unfair to claim that it is social media and search engine monopolies that are the only culprits, but there is no denying that between them, Facebook and Google are thought to have sucked as much as $4 billion in advertising revenues from the mainstream media (print, radio, television and online).

Hence, in the Melbourne and Sydney public hearings this week, the focus of questioning from the Senate Select Committee members has been to gauge support for a proposition that social media aggregators and search engine companies should pay a levy that might be used to fund more public interest journalism.

The detail is at best vague, or perhaps even non-existent at the moment, but the Facebook/Google levy, as it is becoming known, is a serious proposal being considered by senators.

At the Melbourne hearing on Monday, a number of academics from the Journalism Education and Research Association endorsed the idea of the levy and also suggested a range of other funding mechanisms. Many of them were outlined in a submission from the Public Interest Journalism Foundation, presented by Associate Professor Margaret Simons and Dr Andrew Dodd.

These proposals appear to have widespread support:

  • an independent production fund similar to the scheme used to fund Australian content for film and television;
  • a tax offset, similar to the deductions allowed for research and development, that would be reinvested in hiring journalists;
  • tax relief for philanthropic donations made to not-for-profit news organisations.

Dr Andrew Dodd spoke to IA after the Melbourne hearing on Monday and discussed the funding proposals now being considered by the Senate Select Committee. 

While the detail is yet to be fleshed out and there is no guarantee that the Turnbull Government will implement the Senate Select Committee’s recommendations, they do have some merit and echo many of the points raised in IA's submission to the inquiry.

Read Independent Australia's submission to the Select Committee on Future of Public Interest Journalism HERE.

Listen to IA's interview with Dr Dodd here:

You can follow political editor Dr Martin Hirst on Twitter @ethicalmartini.

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