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Australia's Confused Tech Regulators Are Cracking Down on Google for Using Links

If the new trustbusters get their way, tech platforms might be forced to pay money to traditional news outlets for the privilege of linking to their content.

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Economists have long warned that a great deal of regulation that is supposedly in the public interest acts in practice as a transfer of wealth from one private interest to another. Policy makers are usually demure enough to hide this. It is rare that rent-seeking is as explicit and open as the Australian government's current attempt to expropriate money from Facebook and Google—money that will be directly paid to the traditional news outlets that these tech companies have disrupted.

This is much more than just a regional policy fight; what is happening in Australia tells us a lot about how the changing economics of media are feeding the bipartisan war on the tech industry in the United States and globally. Much of what is dressed up as populist anti-tech policy is in fact an attempt by legacy media companies to weaponize confused regulators against their competitors.

The Australian government wants Facebook and Google to sign onto what they call a "News Media Bargaining Code," which will require tech companies to pay news organizations when news content is "included" on the digital platforms. The exact price to be paid is meant to be negotiated by media companies and digital platforms. The rationale offered by Australian antitrust regulators is that there is a "bargaining power imbalance" between tech and media companies, hence the need for government action to get negotiations started. 

You may be tempted to read that paragraph again. Don't bother. The government's argument is euphemistic and its reasoning is obscure. The most obvious problem is that neither Facebook nor Google "include" news content on their platform. The dispute is not about intellectual property theft; all tech companies are doing is linking to news sites. Facebook allows users to share links. Google offers links through its general search function as well as its Google News search service. The upshot is that the Australian government wants Facebook and Google to pay news organizations for the privilege of linking to their content. 

Unsurprisingly, Facebook has said if it is forced to pay it will simply block Australians from sharing news links. Google might also shut down its Google News service—that's what happened when a similar policy was introduced in Spain in 2014.

Much like the U.S., the Australian media sector is in economic freefall. And like the U.S., both Australian progressives and conservatives have been regarding tech companies with increasing skepticism. We usually think of anti-tech skepticism as ideological—conservatives are at odds with socially liberal Silicon Valley types while progressives look at Silicon Valley as the new robber barons. But in Australia, it is strikingly obvious how the economic collapse of traditional media causes anti-tech sentiment.

Throughout the 20th century, the newspaper business model was simple: Newspapers sought to match readers with advertisers. Advertising paid for journalism, which attracted readers, which then attracted more advertising, and so on. The more readers the better. So newspapers tried to appeal to the median reader. 

The history of the media in the last two decades is the slowly unfolding consequences of advertising migrating from the print media to the internet. This creative destruction not only undermined business models that paid for mass-market journalism, but reshaped how public debate is conducted. The growth in media partisanship in recent years could be because media outlets no longer try to appeal to the median reader—they try to engage a passionate few who will stump up a subscription fee. That is, media partisanship has economic causes.

The other consequence is political backlash against the big tech companies. 

For generations, the art of politics involved serenading the local press, getting an audience with the regional media mogul, or building a relationship with a sympathetic journalist who could be relied on to get a political message out. 

Now those friendly moguls and journalists are on the backfoot, shocked by the extraordinary growth of the digital platforms that seem to have ripped both the economic high ground from under them. And the political class is starting to respond to the new media normal the best way they know how: with threats of regulation.

It is easy to laugh at the odd populist attempts to tame digital platforms, such as Sen. Josh Hawley's (R–Mo.) 2019 proposal to ban autoplay videos and infinite scrolling. But the Australian experience shows that the greater threat to digital platforms comes from antitrust regulators, dressed up in bizarre claims about "bargaining power imbalances."

Antitrust policy in the 21st century is particularly vulnerable to this sort of strange thinking. Antitrust was conceived in a world of monolithic corporate hierarchies—factories that built physical things and distributed those things using physical infrastructure like rails and ports. Digital platforms are hard to understand through the traditional antitrust lens. 

The more users a digital platform has—the more it dominates a market segment—the more valuable that platform is to those users. We want to use the social media network that everyone else is using. And to get more users, platforms often provide access to one side of the market for free. For regulators used to hunting for predatory pricing, this just looks weird. At the same time these digital markets are highly dynamic; firms tend to dominate them, but not for long. This too leaves regulators in a bind. They've spent more than a century warning of the dangers of monopolies, but now they're struggling to identify the actual harm these digital platform "monopolies" are causing.

Australian regulators are confused as to what to do and have proposed everything from regulating Facebook and Google's algorithms, to enacting new privacy laws, to giving more money to public broadcasters.

It's clear that U.S. regulators are confused too. In early September, The New York Times reported that while the Department of Justice plans to imminently bring an antitrust case against Google's parent company, Alphabet, there is much internal disagreement about what the grounds of the government complaint should be. 

As the Australian experience shows, this combination of confused regulators and aggrieved, politically connected industries is a dangerous thing.

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  3. In early September, The New York Times reported that while the Department of Justice plans to imminently bring an antitrust case against Google’s parent company, Alphabet, there is much internal disagreement about what the grounds of the government complaint should be.

    “We’re gonna charge you! With… something!

    1. Assuming the NYT’s anonymous source has the first clue what they’re talking about.

      Not saying the DOJ isn’t planning such a stunt, just that without actual charges impending litigation is rumor, not news.

      1. And yet we just impeached a president over rumors.

        1. Welcome to the “Both sides!” argument.

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  4. “Much like the U.S., the Australian media sector is in economic freefall.”

    Not quickly enough.

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  6. The most obvious problem is that neither Facebook nor Google “include” news content on their platform.

    You may be tempted to read that sentence again. Don’t bother. The author’s logic is overtly “euphemistic” and the reasoning about how Google can exclude some content but, somehow, cannot “include” other content is obscure.

    1. I mean FFS Google News is a news *aggregator* the *only* thing it does in *include* (some) news.

      1. No, it includes *links*.

        1. It also includes summaries and titles.

          1. Which I think is the impetus for this action. If people just read the summary on Google and then does’t click through to the actual news site, they miss out on ad revenue

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          2. No to mention the mott-and-bailey, illogical, snake oil bullshit that Google is peddling and Á àß äẞç ãþÇđ âÞ¢Đæ ǎB€Ðëf ảhf is carrying water for. By his logic, the NYT merely prints letters on paper too, any connection to concepts, facts, and reality are purely the reader’s property.

            If Google doesn’t include news and links then the debacle about comments in The Federalist was bullshit from top-to-bottom and on all sides. Google doesn’t include news, let alone comments, so it can’t possibly exclude them. Why would they threaten to demonetize and deprioritize The Federalist if they don’t include their news in their service/product anyway?

            It’s retarded to the point of saying “the internet is just a series of tubes and all Google does is shuffle the tubes in a neutral manner”.

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  8. So the real question is how much will Google et al charge the Australian companies to continue to link to their sites? I can see starting the negotiations at one cent (US) for each link, clicked on or not, plus one-half cent (uS) for each click. Until the other companies cough up the coin, NO LINKS. Therefore no traffic. Therefore no revenue. Therefore no company. Therefore no need to negotiate. Problem solved.

    1. exactly. a link on one of the world’s top sites is not theft of content, it’s a massive gift of free advertising.

      1. Unless you’re The Federalist… then it’s “free” advertising with some pretty costly strings attached.

    2. As in Europe, this effort is not really Media against Google- because google gives them revenue. It is instead Media against Small Media.

      The reason these traditional media outlets aren’t getting as much revenue is that new sites like Vox and HuffPo are stealing their readers. And hundreds of other small rags.

      Forcing payments to media creates a barrier to entry for Google. In order for them to waste the time to link to you, they have to setup a payment agreement, which of course isn’t worth it for the hundreds of small sites in the “tail” of the publishing industry. But what does the Euro-sphere love more than vertically-integrated, big business that they can bend to their government loving ways? (Not that the US is too much better).

  9. Damn funny how a country founded by convicts got to be so totalitarian.

    1. Just in case you’re not being sarcastic, I’ll fix that misconception for you.

      Australia was not founded by the convicts, it was founded by the guards. Perhaps that helps explain it.

      By the way, I live in the state of Victoria and it is literally a police state at the moment. It has never been as totalitarian as it is right now. Search “victoria australia state of emergency police powers” and pray it doesn’t happen to you.

      We may not be as bad as China yet but, our Premier (equivalent to an American state Governor) wants to push us in that direction. He even signed our state up to the “belt and road” con game. Fortunately, our federal government has the power to stop that from happening but, only as long as it’s not a left-wing government. Once the left gets back into power, it’ll be game-over for Australian sovereignty.

      1. Search “victoria australia state of emergency police powers” and pray it doesn’t happen to you.

        OK, not saying this to be a dick, because you appear to be on “our side”, but… wow, Australia providing an amazing example of the consequences of gun confiscation. Which, since “But the Australia ban!” is a favored tactic of the American left, I thank them for. But I’m sorry you have to live through it to provide the example. :-/

        1. A lot of people hold this fantasy that if the state overreaches they will mount an armed insurrection and take their rights back by force. I haven’t heard of it actually happening anywhere. (Successfully, at least.)

      2. And yet I have a friend in Victoria that defends the government every time I point out a problem with what they do. I’m just glad I don’t live there.

        1. Ride ‘Em, I’ll bet your friend is a dyed-in-the-wool, rusted-on Labour supporter and they probably have a job paid for by the government. They probably haven’t lost their job this year (unlike millions of other people, particularly those in hospitality and tourism) and they’ll keep voting Labour no matter how much damage they do. Unfortunately, the left has a strong grip on this country (mostly due to public sector unions) and we are stuck with all their crappy ideas for the foreseeable future.

          As for our gun laws, let’s just say that gun-owners represented a small fraction of the population at the time they changed the laws so, there wasn’t much opposition to the idea. Those of us who like guns never stood a chance because, most people thought it was better to take everyone’s guns away than let one crazy person kill a bunch of people. I guess the idea of stopping crazy people from owning guns never occurs to anyone in whichever country you’re living.

  10. So then the media’s clicks will go down, along with their ad revenue. Great plan to hasten their demise. Way to go Assies. That is the plan no?

    1. Their ad revenue is from Australian companies which foreign readers will never patronize.

      What I haven’t figured out is why haven’t Australian companies figured how to charge for content the way American companies like the WXJ, the Washington Post and the NYT have done?

      Unless I’m missing something (and maybe I am) every time I follow a link to any of those sites I am told I either need to subscribe or that I only have a few free views left for the month.

      1. WaPo and NYT are politically financed propaganda outlets, not money making enterprises.

        1. They still need to earn enough revenue to stay in business, whatever its sources.

          And, your answer has nothing to do with the point I was making, viz, why don’t Australian news outlets know how to charge for their content on the internet?

  11. In other news local library was sued by novelist after discovering a reference to his book in the card catalog.

    Okay to be fair, some people really do get hung up on the old reference thing. Richard Stallman and GNU, for example, consider references to routines in a software library to constitute a derivative work of that software. Okay, way off topic here, but is it? Referencing a work is not the same as “appropriating” that work.

    1. You laugh, but you are not wrong. Way back in the day, someone at the RIAA or equivalent, a counterpart to that failed B actor that ran MPAA for decades, gave a speech denouncing libraries for letting people read books for free, wanted to shut them down.

      (I may have those organization abbreviations wrong. It was a long while ago.)

      1. I remember that. I also remember Garth Brooks shitting his pants over used CD shops.

  12. Confused Tech Regulators

    You had me at “tech regulators”

  13. That Gruniad link to a 2014 article on the Spnish trying the same thing shows the proggy theft mentality in full splendor. It admits that Google shutting down their Spanish news page was inevitable, but claim so only because Google is so powerful. Completely ignore the economic reality that Google cannot afford to pay for linking; or rather, the economic reality that if Google did pay for linking, they’d have to pass on that charge for every news search, no one would pay for those news searches, and there’d be no revenue to pass on. The author acts as if it’s entirely down to Google simply being too rich and powerful.

  14. What’s funny is countries keep trying this – ignoring what happened when Spain tried it first.

    Google said ‘OK, bye’. And stopped linking to Spanish sources. And the Spanish news companies freaked the fuck out because now no one was driving attention towards their sites.

    Seems like the ‘Top Men’ can’t understand the value one group can provide to another unless there’s a dollar value attached to it. Same as the idiots who think Steam is ‘ripping off’ developers because it wants 30%.

    1. Video games is also what came to mind for me. Steam is the greatest thing that happened to gaming. Anybody who dislikes them for some reason is free to find games elsewhere. Though few do, so it is hard to take seriously people’s complaints about predatory business practices.

      1. My very best friend wrote a Steam game. He wrote it because he wanted to write a video game, but it’s been successful enough that he’s almost all the way up to retroactively having earned almost minimum wage (Federal minimum wage, $7.50 / hr) for it. Not bad for something he did as a hobby.

        Also, some Twitch streamer found the game, played it on his apparently quite popular channel, which led to some amusing shenanigans while the two of us tried to figure out where the random $3k (net) in sales that showed up in his bank account came from. 😀

        1. That’s awesome. Sometimes people also criticize Steam for lower their standards to accept games. But I would rather have it this way than having them being too strict. Its cool finding indie games that you can unexpectedly get 10 to 20 hours out of. These types of games would never have found a publisher twenty years ago.

          1. I pretty much guarantee none of my hobbies (mostly, building weird cars) is ever going to result in $3k randomly showing up in my bank account with no extra work. Heh.

            And yeah, giving very small developers a platform is super cool. 😀

            1. I’m sure the libertarian commenting will eventually earn you a profit, as comedy clubs continue to close over government dictates. People will pay humorists like you to lead the way out of state oppression.

              /not sarcastic

      2. There’s also GOG.com. Which does NOT require any phone-home privacy snooping, no DRM bullshit, or even a separate game launcher platform. It’s just an online store that sells games. Gosh.

        People like Steam because it’s big and they don’t know about any other option. As such it’s like D&D and Budweiser. They’re popular because people don’t know that there are better options.

        1. The DRM is typically up to the publisher, not Steam itself, unless it changed in recent years. I never understood the phone number complaint. Steam has had my phone number (home phone, of course) for 15 years and I couldn’t have known the difference. As for the launcher, it is pretty nice to have all the games in one place, particularly if you play in communities. GOG is fine for single player gaming or retro-gaming but many people not only tolerate but actually are attracted to the features that come with the Steam launcher.

          1. ‘Phone home’ has nothing to do with your phone number. Its a DRM technique whereby a program will check in with a DRM server and re-verify that you’re running a legit copy.

            Steam does have DRM. Its minimal and unintrusive, but Steam itself *is* DRM in a way that GoG is not.

        2. You can play Steam games offline, too. Same best friend is building an arcade machine which will have a few Steam games in it, but doesn’t want the machine connected to the ‘net, for stability reasons. So he’s got a shim that pretends to be the Steam service, when those games start up.

        3. That may be – but its not the point I’m making here.

          Steam provides a lot for that 30% – a reliable, worldwide CDN (Steam runs parallel internet infrastructure to do this), easy access to a huge customer base, all those stupid ‘social media’ connections that the kids are into these days (get off my lawn!).

          Epic (and GOG) get away with charging less because they off less utility – to a developer. And that’s who we’re talking about here.

          No one puts their game only on GoG. No one puts their game only on Epic – unless Sweeney bribes them to. Tons of games, *especially* games by unknown developers, are only available on Steam. Because of the value-adds Steam brings that come from that 30% cut.

    2. Okay, so after banning them from linking to your cronies fails you just mandate they link to your cronies, problem solved.

  15. Australian regulators are confused as to what to do and have proposed everything from regulating Facebook and Google’s algorithms, to enacting new privacy laws, to giving more money to public broadcasters.

    It’s clear that U.S. regulators are confused too.

    Well, perhaps they’re confused as to which side is going to pay them better to come down on their side, but a general confusion in regards to not knowing what the fuck they’re talking about has never been an impediment to crafting regulations before and it’s certainly not going to be an impediment now.

  16. There are others aspects to this to be considered, as well, in Australia. For one, having Google means that local news sources are competing with international news sources for international headlines. Preventing Google from linking to local news sources may mean that more Australians are getting their international news from non-Australian sources–not the outcome they’re going for, I’m sure.

    The other aspect of this is that . . . we imagine that the rest of the world wants news coverage more like we do things in the U.S., but that isn’t necessarily true. In Australia, speculating that a mother is to blame for not watching her child when the child accidentally drowns in the family’s pool is a legitimate defamation case–whether that speculation is done by the newspaper itself or that speculation is done in comments on that newspaper’s website. Speculating about the guilt of a defendant in a high profile murder case or rape allegation, likewise, is a defamation lawsuit. Politicians sue newspapers for publishing stories about them all the time.

    Here’s an Australian senator successfully suing an interviewer for “slut-shaming”.

    https://www.theguardian.com/australia-news/2019/nov/25/sarah-hanson-young-awarded-120000-damages-defamation-david-leyonhjelm

    We’re not like that in the U.S. because our culture and our laws have evolved to conform with the First Amendment, but other commonwealth countries don’t have the First Amendment–and plenty of people in Australia, Canada, New Zealand, and the UK like it that way. When Google links to other news sources, they’re bringing in news and comments that are beyond the reach of Australia’s legal system and government control. And we haven’t even started talking about Australia’s hate speech laws. How do they enforce those when Google is linking to news sources from outside Australia?

    1. How do they enforce those when Google is linking to news sources from outside Australia?

      Geofencing. See: China.

      1. Yeah, I’m not sure they’re ready for that from a regulation standpoint.

        Australia still ranks much higher than the U.S. on the Economic Freedom Index–and they should.

        https://en.wikipedia.org/wiki/Index_of_Economic_Freedom

        It’s just that . . . our founding fathers, in their infinite wisdom, decided that they didn’t want to be like England in regards to the regulation of speech, but the commonwealth countries that didn’t leave the U.K. until they were used as cannon fodder in World War I, they got the memo on free speech but threw it away. They don’t want to be like Americans in terms of free speech (or much else). Ask any Canadian and they’ll tell you that “because that’s the way they do things in the USA” isn’t a persuasive argument.

        The commonwealth countries may be ahead of the American curve in terms of their desire to be able to sue the media for the shit they say. I guess that’s the ultimate dividing line. On one side, you’ve got a society where people and the press can say pretty much whatever the fuck they want. On the other side, you’ve got a society where little people can sue the news media for saying pretty much anything about them–sometimes even if it’s a fact. After all, the truth is whatever a majority of the jurors say it is, and the media isn’t just trying not to lose lawsuits. They’re trying to avoid getting sued.

        If you publicly speculate about someone’s guilt in a high profile case, the defendant can sue them for prejudicing the jury. How well do you think that would go over with Americans in the case of the cops who beat George Floyd? I keep thinking about this in terms of getting rid of Section 230 in the U.S. The effect would be more like what you see in the Australian news media already–even if the defamation law still made the plaintiff prove both malice and damages for a win because of the First Amendment, they still want to avoid a slew of lawsuits.

        So, what happens if the news media in the USA isn’t allowed to post stories that suggest the cops in the George Floyd case are guilty of a crime? What happens if African-Americans aren’t allowed to post comments suggesting that the cops in the George Floyd case are guilty? What if civil rights leaders open themselves up to lawsuits if they go on television and say that the cops in the George Floyd case are guilty of a crime? How is this a better society? Are we trying to start more riots?

        If we thought it was outrageous when the news media refused to use the word “riot” to describe looting and arson, how bad will it be when the news media refuses to infer that a cop might be guilty of police brutality until after the cop has been found guilty by a jury?

        1. Yeah, I’m not sure they’re ready for that from a regulation standpoint.

          Australia is beating down doors and arresting people for talking about violating the mask/social distancing guidelines.

          They’re ready for that.

          1. I’d be interested in seeing the link to that.

            There are progressives enclaves of Australia, just like there are in Texas. Nanny staters may be quite popular in Australia in certain places, and if we’re talking about an area where the economy is highly dependent on tourism, I can imagine the locals getting real upset about people who refuse to wear a mask.

            Still, I”m not sure they’re onboard with the Great Firewall of China yet.

            1. Web search for “pregnant australian covid arrest”.

            2. There are progressives enclaves of Australia,

              Where do you think they’re arresting pregnant mothers?

              1. It’s called the state of Victoria. I know because I live in it (a police state, that is).

      2. Philosophical question “if you can go back in time and stop the Holocaust would you?”

        Google leadership “no, we would build an efficient jew tracker app”

        1. Philosophically, I’ve weighed the bet on the immortality of the soul vs. the afterlife vs. getting your head cryogenically frozen in the hope that people thousands of years in the future will care enough about you that they’ll bother to bring you back from the dead once the technology becomes feasible.

          It might be interesting to bring a peasant from the 1300s back from the dead for anthropological and historical reasons, but am I willing to shell out $100 bucks for it? We walk past homeless people all the time without giving them any money, and the dead are even easier to ignore.

          I’d prevent the holocaust in a heartbeat, but do people really care about one guy with his head frozen in a lab somewhere?

          Wasn’t it Stalin who supposedly said, “A single death is a tragedy. A millions deaths is a statistic”? Maybe he was wrong about that, too. A million deaths is a tragedy. A frozen head in a lab may just be a punch line. Look upon my works [frozen head], ye mighty, and despair!

    2. Oh, and Australia and the UK have laws whereby the courts can do ‘prior constraint’ with speech – forbidding you from talking about certain subjects or people under investigation.

      Which gets roflstomped all the time when Brits and Aussies just go to an American site to get the un-censored story.

      1. Exactly.

        How do you the nanny staters feel about that?

        1. If Google’s reaction is to stop providing links to news articles, that may be the intended outcome.

    3. Seems like I get plenty of news links from Australia. They’re usually the ones with trojans and viruses.

  17. “Facebook allows users to share links. Google offers links through its general search function as well as its Google News search service.”

    They allow this as long as it doesn’t upset them. If it does then they block links shared or hide them from search.

    These two companies are amoral unethical and deliberately use the news mafia to push a left wing agenda.

    1. So, making them pay for links does what in this scenario?

  18. It is easy to laugh at the odd populist attempts to tame digital platforms, such as Sen. Josh Hawley’s (R–Mo.) 2019 proposal to ban autoplay videos…

    I DON’T LAUGH AT THIS AT ALL. It’s the only good thing a politician has tried to do for me in the last century!

    1. I somewhat agree. But only because I haven’t run across any mandatory autoplay yet. So far there has been a setting or other easy way to stop it. But I still somewhat agree because it’s a war with some sites over my use of adblocker. I’ve permanently boycotted some sites over this, they’ll never get my clicks ever again.

      While I think Josh Hawley is the biggest penis in the senate, I’m willing to consider compromising some of my anarchist principles for some mild and toned down privacy regulations that address this issue.

  19. How much do I have to pay if I share a link in a group text?

  20. I figure it’s only a matter of time before the U.S. government either taxes the shit out of email or bans it entirely to “save” USPS.

    The more I see of “progressive” government, the more it seems to me they want to “progress” us all to the 19th Century, not the 21st.

    1. Just like conservatives aren’t the conservatives of a century ago, liberals are not longer the liberals of a century ago, so too are progressives NOT the progressives of a even two decades ago.

      Hell, calling them “socialists” isn’t even correct. They want government control over the economy not because of Marx or whatever, they want it because they’re too busy fapping to the idea of universal and omnipotent government to consider anything else. If it increases the size, scope, and bloat of government, in any area, they’re 101% for it. The only thing slowing them down is them figuring out how to spin it all.

      1. Yeah, I’m using “progressive” in an admittedly archaic sense: not tied to a party but rather to a belief that an all-powerful central government should direct society at all levels, steer the culture in the “correct” direction, etc.

        1. “authoritarians” is the word.

          1. There are other types of authoritarian.

    2. The Green Raw Deal has that time shift as its stated aim — no air travel, everyone back to trains, even to Hawaii.

      1. So, back to a time when only the wealthy could afford to travel.

        1. You cracked the code!

          Yes, that’s exactly what it is. Robert Moses 11 foot bridges and 12 foot buses all over again. Plus a license to snoop into anything you might be doing, as anything you might be doing will require energy to do.

          It’s a brick in the pending neofeudalist wall between their palaces and our favelas.

  21. shocked by the extraordinary growth of the digital platforms that seem to have ripped both the economic high ground from under them.

    Both the economic high ground and what else out from under them?

    You use the word both, which implies two things, but then list only one thing.

  22. Google should do in there in Australia what they did in France some years back when then newspapers wanted to charge Google for snipits that it published in its news feed. They succeeded in get in the law passed. Then Google stopped using any news that originated in these papers and did not even refer to them. Suddenly these newspapers stopped getting their papers read and started losing money because no body could even Google the paper to go to their site. Not long after that started the law was repealed and Google started publishing snipps again and the newspapers started making money because people could find their paper to read the news they were interested in.

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