Could governments start demanding taxes from tech giants after Facebook Australia spat?
By Muhindo Morgan
On 12th February, 2021, Australia moved a step closer to introducing ground-breaking legislation that will force tech giants to pay for sharing news content, a move that is likely to change how people world-wide experience the internet.
In 2020, Facebook generated over 97.9% which is close to 86 billion U.S. dollar of its revenue from advertising. Google, a search engine that essentially works as a directory for world wide website links generates over 181.7 billion U.S. dollars from advertisement, a business that traditional media relies on for revenue. Today one can literally access any kind of information inform of images, videos and writeup on anything on Google or Facebook sites.
The magic is in the immense content that is created by individuals and other media platforms that these giant-tech conglomerates reap immense wealth without reciprocity in absence of legal regimes to deal with taxation and checking their powers.
In Uganda, the government introduced an Over-The-Top services tax commonly known as social media tax levied on social media use. No doubt, this was a right shot though against a wrong target. With all the evil spirits haunting the rate of speech, access to information and retarding digital growth, the tax burden unfortunately falls on the consumers of tech services than the tech-giants.
Australia’s move has been obviously received with mixed feelings but it has many wins; government has been accused of allying with major media groups to prop up their struggling news platforms. Legitimately, it has become hard for businesses and corporations to rely on local traditional media to advertise their services or products. This is attributed to the effectiveness and efficiency of Facebook’s and Google’s algorithms relying on a comparative advantage of vast number of users and users’ personal data; an advantage that local media platforms do not share.
For competitive communication services and raising revenue from bigtech reaping over $81 of every $100 of every online advertisement in Australia, the Regulations make economic sense.
However, the move is not without its own challenges, Facebook has already threatened to block Australian users from sharing local news stories on its platforms while Google has made concessions with big news platforms like Rupert Murdoch’s News Corp, two different directions but still not solving the problem.
Facebook pulling out of the market means a lot to the Australians, it has the biggest share of social media users followed by its affiliate companies Instagram and WhatsApp in the third and fourth positions respectively, the same statistics are consistent almost elsewhere in the world. This means restricting speech and accessing information which obviously has a great negative effect on democracy.
However, the conundrum lies in the precedent that is being set, the European legislators are also mooting a EU-wide digital market legislation a move that the inventor of world wide web Tim Berners-Lee has already warned against claiming that it could open a Pandora’s box of monetary claims that would break the internet. He further argues that links are fundamental to the web, and if the precedent is followed elsewhere, it could make the web unworkable around the world.
Is it the right time for tech-giants to start contributing to the economies they are reaping from? In my honest opinion yes, this may be the beginning of the end of their monopoly, bully character, arrogance and giving fair competitive ground for other actors, the concessions by google to big news platforms is analogous to letting another bully join the clique of bullies. While the whole world is grappling with issues related to taxing digital platforms, online dispute resolution, intellectual property and cyber security, any legislation should spur growth of inclusive and, fair internet and technology.
By Muhindo Morgan
Digital rights & Human rights Lawyer
At Kiiza & Mugisha Advocates
Email: morganapollo22@gmail.com
