Australia adds tax and copyright to pressure on duopoly

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The ACCC probe into the influence of Google and Facebook - part of the deal agreed with minority NXT members to get media law reform through parliament - is one of several Australian moves adding pressure on the duopoly.

The two companies are among those which will be excluded from broader "safe harbour" provisions in the Copyright Act under federal legislation introduced this week. Some local start-ups are also excluded.

Australia's tax office is also pursuing Google and Facebook as part of a push to get all companies - including the world's largest multinationals - to pay their "fair share" of tax for operations in the country. Joint forensic tax ­audits with the tax authorities of other countries are the latest move.

In comments to the Australian newspaper, tax commissioner Chris Jordan says that at one point Google was still being looked after by the tax office's SME group because its reported turnover in Australia was less than $250 million a year, a situation he described as "absurd".

A blitz on multinationals also including Amazon, owned by Washington Post boss Jeff Bezos, had brought a $5 billion "windfall" in unpaid taxes in 16 months, and "many more billions of dollars" are expected to follow. Amazon started trading in Australia this week.

Under the probe by the Australian Competition and Consumer Commission, the impact digital platforms are having on the state of competition in media and advertising markets will be examined.

The ACCC inquiry - which reports in two stages at 12 and 18 months - will be empowered to obtain information and test whether a case can be made for further intervention, or use of its broader enforcement powers.

Terms of reference include how platform service providers use their market power with content producers and advertisers; how they impact content choice and quality; and the effect they have on media and advertising markets. It will also look at the effect of trends such as innovation and technological change, and of the "information asymmetry" between platforms, advertisers and consumers.

The Australian says Nick Xenophon Team senator Stirling Griff worked on the terms of reference, with the party still concerned by the "market-distorting powers of internet giants such as Google and Facebook.

"Digital advertising now ­accounts for almost half of the Australian advertising market and traditional media is taking an increasingly shrinking share."

He said that while they did not bear all the responsibility for the media's current woes, they needed to accept "that their hands are not clean".

America's News Media Alliance has welcomed the "proactive steps to protect the integrity and future of journalism". In the course of advocating for intercession on behalf of publishers against Facebook and Google's market dominance, it called on the US Congress in July to allow publishers to negotiate collectively.

A deal in Australia to secure the support for the NXT and One Nation parties for the media law reform legislation which removed restrictions publishers' ownership of broadcasting companies was pushed through when (Rupert's son) Lachlan Murdoch and Bruce Gordon were trying to take full control of the country's Ten Network. In the event, the TV station was bought from administrators by CBC which, with Twentieth Century Fox, was a major creditor.

The deal with NXT and One Nation is to deliver more than $70m in concessions including a $10m scheme to encourage employment of cadet journalists, a $50m media innovation fund and $12m for community radio stations, along with the ACCC inquiry and changes to the ABC's charter.

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