NewsCorp Legacy Media vs. Digital Platforms Facebook and Google in Australia

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While many nations and trade groupings have or are developing ways to protect personal data and constrain digital giants in Facebook and Google, traditional media groups are also looking for assistance.

 

NewsCorp and other media groups in Australia first demanded an ACCC Australian Competition and Consumer Commission investigation of digital platforms use of media snippets and content, then demand that the same platforms should pay for this service.

 

However, many in traditional media, the ACCC and government do not seem to understand how digital works, the reliance elsewhere too on digital click throughs, that advertising has migrated from printed etc. to digital and middle aged down to youth have also migrated…..

 

Australia to make Facebook, Google pay for news in world first

 

Colin Packham

 

SYDNEY (Reuters) – Australia will force U.S. tech giants Facebook Inc (FB.O) and Alphabet Inc’s (GOOGL.O) Google to pay Australian media outlets for news content in a landmark move to protect independent journalism that will be watched around the world.

 

Australia will become the first country to require Facebook and Google to pay for news content provided by media companies under a royalty-style system that will become law this year, Treasurer Josh Frydenberg said.

 

“It’s about a fair go for Australian news media businesses. It’s about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape,” Frydenberg told reporters in Melbourne.

 

“Nothing less than the future of the Australian media landscape is at stake.”

 

The move comes as the tech giants fend off calls around the world for greater regulation, and a day after Google and Facebook took a battering for alleged abuse of market power from U.S. lawmakers in a congressional hearing.

 

Following an inquiry into the state of the media market and the power of the U.S. platforms, the Australian government late last year told Facebook and Google to negotiate a voluntary deal with media companies to use their content.

 

Those talks went nowhere and Canberra now says if an agreement cannot reached through arbitration within 45 days the Australian Communications and Media Authority would set legally binding terms on behalf of the government.

 

Google said the regulation ignores “billions of clicks” that it sends to Australian news publishers each year.

 

“It sends a concerning message to businesses and investors that the Australian government will intervene instead of letting the market work,” Mel Silva, managing director of Google Australia and New Zealand, said in a statement.

 

“It does nothing to solve the fundamental challenges of creating a business model fit for the digital age.”

 

Facebook did not immediately respond to a request for comment.

 

“UNFAIR AND DAMAGING”

 

Media companies including News Corp Australia, a unit of Rupert Murdoch’s News Corp (NWSA.O), lobbied hard for the government to force the U.S. companies to the negotiating table amid a long decline in advertising revenue.

 

“While other countries are talking about the tech giants’ unfair and damaging behaviour, the Australian government … (is) taking world-first action,” News Corp Australia Executive Chairman Michael Miller said in a statement.

 

A 2019 study estimated about 3,000 journalism jobs have been lost in Australia in the past 10 years, as traditional media companies bled advertising revenue to Google and Facebook which paid nothing for news content.

 

For every A$100 spent on online advertising in Australia, excluding classifieds, nearly a third goes to Google and Facebook, according to Frydenberg.

 

Other countries have tried and failed to force the hands of the tech giants.

 

Publishers in Germany, France and Spain have pushed to pass national copyright laws that force Google pay licensing fees when it publishes snippets of their news articles.

 

In 2019, Google stopped showing news snippets from European publishers on search results for its French users, while Germany’s biggest news publisher, Axel Springer, allowed the search engine to run snippets of its articles after traffic to its sites to plunged.’

 

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Create Growth for Society not Wealth for the Rich

Much discussion of economic policies, business and government, especially in the Anglo world, revolves around monetarist or libertarian need for lower business and personal taxes, trickle down effect, few government services, smaller government and talk of individual prosperity.  However, the result has led to increasing indebtedness, more wealth for the already wealthy, more significant spread in the gini coefficient and sub-optimal economies.

 

From Inside Story:

 

Need growth? Scrap policies that favour rich people and monopolies

 

Adam Triggs 1 June 2020

 

Breaking self-perpetuating cycles of rising inequality will be key to Australia’s economic recovery

 

The American economy was stuck in a vicious cycle before Covid-19. With highly indebted poorer households spending less, demand was falling and economic growth had been weakened. To stimulate activity, the Federal Reserve cut interest rates to make borrowing cheaper, resulting in even more debt and worry. And so the cycle started over again.

 

New research from economists Atif Mian, Ludwig Straub and Amir Sufi shows that this cycle is fuelled by inequality. Wealthy people have cornered a greater share of national income, and are saving more. Less well-off people are receiving a smaller share of income, and borrowing more. The resulting decline in interest rates has kept the cycle going.

 

It sounds eerily similar to the situation in Australia, and it’s not the only cycle that’s increasing inequality. A lack of competition between firms is having a similar effect: transferring wealth from poor consumers to rich shareholders. Breaking these self-perpetuating cycles will be critical to Australia’s economic recovery.

 

The nub of the problem is that rich people have a nasty habit: they save too much and spend too little. This isn’t necessarily a problem if their savings are invested in expanding businesses, creating jobs and contributing to economic activity. Sadly, though, Australia’s well-documented increase in inequality hasn’t been accompanied by an increase in investment. Quite the opposite: while inequality has grown, investment has flatlined.

 

Mian, Straub and Sufi’s research shows that this “savings glut of the rich,” as they call it, is creating as well as financing the debts of the non-rich. Too much saving and too little investment has depressed interest rates; and lower interest rates are fuelling debt levels among non-rich households, which are borrowing to keep up. For the first time, this research shows, the rise in the share of income taken by the rich can explain almost all of the increased household debt of the non-rich……

 

What to do?

 

Australia’s inequality problem isn’t new, but we are becoming increasingly aware of just how damaging it is economically, politically and socially. More alarmingly, we are learning how the macroeconomic and competition effects are creating self-perpetuating cycles of inequality. The recovery from Covid-19 will require deep structural reform to lift growth, and also presents an opportunity to break these cycles through holistic reform of tax, welfare and competition.

 

The tax system is too generous to the rich, and the welfare system is too mean to the poor…..

 

We can also change the welfare system to directly reduce poverty and thus inequality…..

 

To boost competition, the government should reform the laws that shield many industries from competition — including those in airlines, pharmacies, coastal shipping, the legal profession and the medical profession……

 

The laws regulating mergers and acquisitions should be tightened to guarantee more scrutiny of proposed mergers in industries that are already concentrated…….

 

Past epidemics have one thing in common: they made inequality worse. There’s no reason to think Covid-19 will be any different. The Australian economy can’t afford to snap back to old habits. 

 

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History of Globalisation and 21st Century

Globalisation has been more apparent in public, political and media narratives whether for economic or national reasons, mostly negative.  However, globalisation is a fact of life and can be positive for individuals, communities, sole traders, small and medium enterprises.

 

In fact, those promoting negatives of globalisation in favour of nativist policies, along with anti-immigration sentiment and antipathy towards educated elites, often have a need to manipulate ageing electorates.  This was seen with Brexit and Trump with the promotion of antipathy towards the EU European Union and multilateral trade agreements or trade blocs; giving advantage to existing global corporates avoiding regulation, taxation, competition and other constraints.

 

From The Mandarin Australia article excerpts from Peter Vanham is head of communications, Chair’s Office, World Economic Forum.

 

A brief history of globalisation

 

When Chinese e-commerce giant Alibaba in 2018 announced it had chosen the ancient city of Xi’an as the site for its new regional headquarters, the symbolic value wasn’t lost on the company: it had brought globalisation to its ancient birthplace, the start of the old Silk Road. It named its new offices aptly: “Silk Road Headquarters”. The city where globalisation had started more than 2,000 years ago would also have a stake in globalisation’s future.

 

Alibaba shouldn’t be alone in looking back. As we are entering a new, digital-driven era of globalisation — we call it “Globalisation 4.0” — it is worthwhile that we do the same. When did globalisation start? What were its major phases? And where is it headed tomorrow?

 

Silk roads (1st century BC-5th century AD, and 13th-14th centuries AD)

 

People have been trading goods for almost as long as they’ve been around. But as of the 1st century BC, a remarkable phenomenon occurred. For the first time in history, luxury products from China started to appear on the other edge of the Eurasian continent — in Rome. They got there after being hauled for thousands of miles along the Silk Road. Trade had stopped being a local or regional affair and started to become global.

 

Spice routes (7th-15th centuries)

 

The next chapter in trade happened thanks to Islamic merchants. As the new religion spread in all directions from its Arabian heartland in the 7th century, so did trade. The founder of Islam, the prophet Mohammed, was famously a merchant, as was his wife Khadija. Trade was thus in the DNA of the new religion and its followers, and that showed. By the early 9th century, Muslim traders already dominated Mediterranean and Indian Ocean trade; afterwards, they could be found as far east as Indonesia, which over time became a Muslim-majority country, and as far west as Moorish Spain.

 

Age of Discovery (15th-18th centuries)

 

Truly global trade kicked off in the Age of Discovery. It was in this era, from the end of the 15th century onwards, that European explorers connected East and West — and accidentally discovered the Americas. Aided by the discoveries of the so-called “Scientific Revolution” in the fields of astronomy, mechanics, physics and shipping, the Portuguese, Spanish and later the Dutch and the English first “discovered”, then subjugated, and finally integrated new lands in their economies.

 

First wave of globalisation (19th century-1914)

 

This started to change with the first wave of globalisation, which roughly occurred over the century ending in 1914. By the end of the 18th century, Great Britain had started to dominate the world both geographically, through the establishment of the British Empire, and technologically, with innovations like the steam engine, the industrial weaving machine and more. It was the era of the First Industrial Revolution.

 

The world wars

 

It was a situation that was bound to end in a major crisis, and it did. In 1914, the outbreak of World War I brought an end to just about everything the burgeoning high society of the West had gotten so used to, including globalisation. The ravage was complete. Millions of soldiers died in battle, millions of civilians died as collateral damage, war replaced trade, destruction replaced construction, and countries closed their borders yet again.

 

Second and third wave of globalisation

 

The story of globalisation, however, was not over. The end of the World War II marked a new beginning for the global economy. Under the leadership of a new hegemon, the United States of America, and aided by the technologies of the Second Industrial Revolution, like the car and the plane, global trade started to rise once again. At first, this happened in two separate tracks, as the Iron Curtain divided the world into two spheres of influence. But as of 1989, when the Iron Curtain fell, globalisation became a truly global phenomenon.

 

Globalisation 4.0

 

That brings us to today, when a new wave of globalisation is once again upon us. In a world increasingly dominated by two global powers, the US and China, the new frontier of globalisation is the cyber world. The digital economy, in its infancy during the third wave of globalisation, is now becoming a force to reckon with through e-commerce, digital services, 3D printing. It is further enabled by artificial intelligence, but threatened by cross-border hacking and cyberattacks.

 

Technological progress, like globalisation, is something you can’t run away from, it seems. But it is ever changing. So how will Globalisation 4.0 evolve? We will have to answer that question in the coming years….

 

From The Lowy Institute:

 

Globalisation Is Still Not A Bad Thing

 

Originally published in the Australian Financial Review by Natasha Kassam

 

COVID-19 signals the end of peak globalisation. Borders have hardened. Tourism has withered. Medical supplies have been blocked at ports. Citizens have been prioritised while foreigners were sent home.

 

Globalisation has been much maligned in recent years – already struck by the financial crisis and the US-China trade war. Growing hostility towards global institutions and trade competition has characterised politics of several countries. And with concern about so-called globalism came attacks on the so-called globalists: “The future does not belong to globalists, the future belongs to patriots,” said President Donald Trump at the United Nations General Assembly last year.

 

Australians, by contrast, have remained largely immune to these trends. New Lowy Institute polling finds seven in 10 Australians say globalisation is mostly good for our country, unchanged from 2019. While the United States has succumbed to protectionism and negativity towards migrants, Australians have remained supportive of free trade. Anti-migration sentiment has always lurked in Australia, but years of polling show that most Australians agree that immigration makes our country stronger and wealthier and contributes to our national character.

 

Ongoing struggles in Australia’s relationship with China, our largest trading partner, could fuel further distrust of globalisation. Disputes over beef and barley exports could just be the beginning. Most Australians already say we are too economically dependent on China, and the recent ambiguous threats of economic coercion against Australian exports will only deepen that concern.

 

Globalisation may have been dealt a grave blow by this virus, and Australia can’t save it alone. As a trading nation, that only succeeds by embracing globalisation – even the devastation of COVID-19 hasn’t yet shaken our fundamentals. It may well do so, deep into a global economic slowdown. But to date, Australians have leaned into their national character, and continued to show resilience in the face of populism and protectionism.

 

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Asian Century Starts 2020?

There has been much discussion over past decades on the rise of China and the Asian century viz a viz the USA and Europe. In recent months there have been clear Covid19 or Coronavirus amelioration strategies while the US, UK and several European nations have struggled, leading to significant economic impacts. More from the Asia Times:

 

Asian century began in May 2020

 

Region has emerged as an economic zone as closely integrated as the European Union

By DAVID P. GOLDMAN
MAY 21, 2020

 

Economic historians may date the start of the Asian century to May 2020, when most Asian economies bounced back to full employment while the West languished in coronavirus lockdown. Asia has emerged as an economic zone as closely integrated as the European Union, increasingly insulated from economic shocks from the United States or Europe.

 

Google’s daily data on workplace mobility uses smartphone location to determine the number of people going to work – by far the most accurate and up-to-date available reading on economic activity. As of May 13, Taiwan, South Korea and Vietnam were back to normal levels. Japan and Germany had climbed back to 20% below normal. The US, France and the UK remain paralyzed. Google can’t take readings in China, but the available evidence indicates that China is on the same track as Taiwan, South Korea and Vietnam.

 

Asian economic recovery is consistent with success in controlling the Covid-19 pandemic. China, Japan, Taiwan, South Korea, Hong Kong and Singapore have Covid-19 death rates a tenth of Germany’s and a hundredth of the rate in the US, UK, France or Spain. As I reported May 21, the US is struggling to re-open its economy despite a much higher rate of new infections than the Asian countries or Germany. That entails substantial risk. Two Ford Motor plants in the US that had re-opened May 17 shut yesterday after employees tested positive for Covid-19, for example.

 

Asia’s short-term surge followed its success in disease prevention. But the long-term driver of Asian growth is China’s emergence as a tech superpower. This week’s session of the People’s Congress in Beijing is expected to pass a $1.4 trillion of new government investments in 5G broadband, factory automation, self-driving cars, artificial intelligence and related fields.

 

Asia now acts as a cohesive economic bloc. Sixty percent of Asian countries’ trade is within Asia, the same proportion as the European Union. The Google mobility numbers confirm what we learned earlier this month from China’s April trade data. Intra-Asian trade surged year-over-year, while trade with the United States stagnated.

 

The surge in Chinese trade with Southeast Asia, South Korea and Taiwan shows the extent of Asian economic integration. China’s exports to Asia have grown much faster than its trade with the US, which stagnated after 2014.

 

China’s stock market meanwhile is this year’s top performer, down only 2% year-to-date on the MSCI Index in US dollar terms while all other major exchanges are deep in negative numbers. The strength of China’s stock market is noteworthy given the escalation of economic warfare with the US, including a US ban on third-party exports of computer chips made with US intellectual property to blacklisted Chinese companies, and the threat to de-list Chinese companies on US stock exchange……

 

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Coronavirus – Trade Issues – US, China and Australia

While the Australian media and government, following the Trump US White House, demand action on China regarding Covid-19 causes or sources, and trade tariff issues, Australian publicly owned and listed miners Rio Tinto, BHP and Fortescue Metals Group have made their first iron ore export deals with China in Yuan, what does this mean for USD as a reserve or trading currency?

 

BHP completes first yuan-based iron ore sale to China’s Baosteel

Min Zhang, Tom Daly

 

BEIJING (Reuters) – The world’s top listed miner BHP Group said on Tuesday it had made its first yuan-denominated sale of iron ore to China Baoshan Iron & Steel Co Ltd (Baosteel) and would explore using blockchain for such transactions in future.

 

The sale of a Cape Size vessel of lump and fines, worth nearly 100 million yuan ($14.1 million), shows the Chinese currency is making further inroads in iron ore trading after Baosteel, the listed arm of the world’s biggest steelmaker China Baowu Steel Group, bought iron ore from Brazil’s Vale SA in yuan in January.

 

BHP said the deal was a part of a 12-month trial and will involve multiple cargoes.

 

The miner is also expecting to be able to complete its first blockchain iron ore transaction with Baosteel soon, it said in a statement. China, the largest iron ore consumer, brought in over 1 billion tonnes of the steelmaking raw material last year and has long sought to gain influence over pricing to help its steel firms weather market fluctuations.

 

In a separate statement, Baowu noted it had now struck yuan-based deals with the “three giants” of iron ore – BHP, Rio Tinto and Vale.

 

The fourth-biggest iron ore miner, Australia’s Fortescue Metals Group, is also selling in yuan after setting up a trading entity in China in April 2019.

 

“The active promotion of renminbi settlement in iron ore transactions is not only for operational needs, but also in line with the trend of yuan internationalisation,” Baowu said.

 

Baosteel recently concluded its first yuan-based iron ore purchase with Rio Tinto supported by Standard Chartered, blockchain financial platform Contour and other parties, according to a Rio Tinto statement sent to Reuters.

 

China’s iron ore imports jumped more than 11% in April from a month earlier as steel mills raced to restore production after the coronavirus pandemic paralyzed the economy earlier in the year.’

 

Related News:

 

How the Yuan Could Become a Global Currency

 

China’s Plan to Replace the U.S. Dollar. As China’s economic might grows, it’s taking steps to make that happen. A slim majority of institutional investors see it as inevitable, but don’t say when. Could we see a switch from a greenback to a redback-dominated world? If so, how and when would that happen? What would be the consequences’

 

China pushes ahead with making yuan a global currency.

 

But  Beijing still has its work cut out to rival the mighty US dollar. Beijing’s bold steps to globalize the yuan, such as its launch of yuan-denominated crude oil futures and its highly anticipated issuance of a digital currency, are in the limelight. But experts say that China has a long way to go to achieve its ambition to make the yuan a key global currency’

 

Rio Tinto, Baosteel use Contour blockchain for iron ore trade.

 

Earlier this week, Contour trade finance blockchain announced Rio Tinto and China’s Baosteel completed a yuan-based iron ore trade using its platform. It was the first blockchain-based letter of credit transaction on the platform for DBS Bank after it joined Contour on Monday. The Chinese government is encouraging trade to be denominated in the yuan / renminbi rather than the U.S. dollar and Baosteel is state-owned.

 

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