Rod Sims Defends His Link Tax With Complete Nonsense Talking Points

Faced with a looming pullout of Meta, Rod Sims pushes his nonsense talking points as if it’s going to make a difference.

For many, Australia has been considered ground zero for the international effort to implement a link tax. While there were other efforts happening at the time (i.e. Spain which saw Google block news links altogether), Australia was generally the furthest along with implementing this ridiculous law. The law passed in 2021 to the dismay of tech observers and copyright experts alike. The fear was long going to be that the platforms would simply balk at the idea and drop news links altogether, causing considerable harm to the news sector.

Those fears were briefly realized when Meta (then simply called Facebook) blocked news links. Indeed, many had expected this to be a permanent thing. Then, to the surprise of many experts and observers, the platforms then signed deals in exchange for not being designated under the Australian News Bargaining Code. The deals were baffling, why would the platforms go along with such deals when they know full well that they benefit very little from such content in the first place?

The best theory at the time was that they didn’t sign those deals because they actively depended on news content. Instead, the deals were signed because it raised the cost to enter into the market for search and social media alike, solidifying their market dominance. What’s more, the theory playing out for the platforms was that Australia would be a one-off incident and the link tax wouldn’t spread beyond the Australian borders.

If that was well and truly the thinking of the platforms (it is the most plausible, after all), then it was short sighted thinking. As we noted at the time, publishers from other countries are going to point to Australia and demand that their countries implement similar laws. This would compel law makers in other countries to push for similar laws as they seek their pound of flesh from the platforms as well.

That is exactly what has happened. Efforts to implement the link tax went on in Canada, the United States, the UK, and multiple European countries as well. The math, predictably, multiplied and the cost of going along with link taxes kept going up. Though the likes of Alphabet and Meta are both extremely profitable businesses in their own rights, sooner or later, the math catches up and it becomes a bad idea to keep paying out all this money for what amounts to no real reason. There are better, more cost effective methods of maintaining a monopoly, after all. It’s simply better to drop news links altogether rather than pay the ransom payments.

Indeed, from Meta’s perspective, this is precisely what they are doing. Last year, Meta dropped news links in Canada just as they had warned they would do. Of course, that wasn’t the only thing Meta was warning they would do. When Meta testified before the Canadian senate, the company told senators that it was unlikely that the deals they signed in Australia would continue. Those warnings also came to fruition more recently when Meta announced that they would not be renewing their publisher deals – instead, opting to just drop news links in Australia just like in Canada.

This was a decision that they probably should’ve stuck to back in 2021. After all, had they just blocked news links and stuck with that decision, it would’ve been much harder for the link tax concept to spread to other countries. By doing this three years later, the impending blocking is more about cleaning up the mess they created back in 2021 rather than nipping these problematic laws in the bud.

Rod Sims has long been an official architect of the link tax law that saw platforms inexplicably go along with. He spent his time since openly lobbying other countries to follow suit with these link tax laws. This includes Canada both at the Senate and in the House of Commons where lawmakers supporting the link tax gushed over what a great man he was (it was really embarrassing).

The problem here is that Sims is now facing the biggest humiliation yet in the link tax debate as Meta is now preparing to drop news links in his own country. In the eyes of those who just blindly scream “Big Tech BAD!!!”, Sims is in the process of going from the hero that tamed “Big Tech” to a failure that is going to cost his own media lobbyist pals millions in an ill-conceived fight, repeating the mistakes of Spain in the process.

Faced with this prospect, Sims apparently wrote an op-ed in the Financial Review defending his governments law (hat tip: Dylan Lindgren). In it, he attacks his critics and accuses them of not understanding the economics of the Australian News Bargaining Code. Here’s one excerpt from his piece:

It is unfortunate that Holden seems incapable of putting an argument without gratuitously insulting those with an alternative view. He alone, it seems, is the one possessing “basic economic logic and common sense”; yet these are areas where he, particularly, needs to show some humility. This is clearly not the way to promote the reasoned debate we need on complex topics.

Holden also invents the arguments of those with an opposing view and then happily demolishes what he has invented. He appears to argue that the logic is that the difficult issues facing media and journalism are all the fault of Meta, when this is not the case, and it should not be up to Meta to bail out media businesses.

On this occasion Holden did not himself invent the argument he then demolished; this argument parrots that put by Meta – that it is not the logic that was used to justify the code would have been apparent from a cursory read of ACCC material.

This is an argument people like us have heard a million times over here in Canada. We point out the flaws in the thinking of supporters of the link tax (i.e. that Meta scrapes and republishes whole articles without permission from the news organizations). When the argument eventually fails completely, supporters move the goal posts and argued that they never said that. This while inventing a whole new argument that is even dumber (i.e. we never said that they stole are articles, we said that Meta steals our audience!).

Then, when holes get poked into that argument (i.e. Uh, that’s the free market, then. Maybe you should create a product that audiences want to consume instead), then the goal posts get moved again (i.e. we never said that they steal our audiences, we said that they have an unfair market advantage by taking all of our advertising revenue!). Inevitably, holes get poked into that as well (i.e. Meta doesn’t produce news. They aren’t even in the same industry as the news companies.)

Sometimes, we end up going full circle with this goal post moving after a while (i.e. We never said that they stole our advertising revenue! We said that they steal our content and make huge profits off our work while not compensating us!). This is why supporters of link taxes get dismissed as being idiots at times. There’s no talking sense into them. It’s little surprise we are seeing this in Australia as well.

From there, Sims appears to launch into his complete nonsense talking points:

The logic for the code was as follows. Meta provides its services free from any monetary payment but in return for the attention and data of users, which it monetises through advertising. It provides a range of content to users that they do not pay for; no wonder they are extremely profitable businesses.

It’s a lot of words to basically say “I have no idea how the internet works”. The content that is available on something like Facebook is content that is wilfully posted by its users. If you don’t want your content on a Meta platform, then don’t post it up there. This is not rocket science. What’s more, this paragraph ignores the fact that Meta offers its server space and bandwidth for free to anyone who wants to use it. It’s a pretty convenient fact to leave out.

The gibberish nonsense of Sims then continued with this:

Having media business content accessed in ways that lead to no payment for content is of particular concern, given the role played by journalism in our society. Media companies have for some time sought to bargain with Meta for payment for their content but Meta has used its superior bargaining power to refuse to negotiate and insists it will not pay for content.

Well, in that case, Sims can pop the champagne now because Meta has said that it intends on blocking news content entirely – or more accurately, Meta is going to be blocking news links altogether. If the concern was that news links (or what Sims calls, “content”) is appearing on Meta platforms in the first place, that won’t be a problem for much longer. It’s also worth pointing out that the news organizations themselves are the ones posting that content on Meta platforms in the first place, but again, we’re conveniently leaving those facts out here.

Sims piece then continues this textual diarrhea:

Keep in mind that Meta is not providing journalism content itself; it is not coming up with a superior news product. What it has done is insert itself between media businesses and their readers, and monetise the attention so gained.

Given this situation, the code follows a well-tested framework in Australia of imposing a negotiate/arbitrate framework. Failing agreement from good faith bargaining, the issue goes to arbitration to determine what, if any, payment should be made. Hardly “stealing”, but rather making sure that there are well-balanced commercial negotiations free from one side exercising its superior bargaining power.

Again, if the news companies don’t want Meta as a middleman, then they can stop using them. News publishers have long not only posted their news content on Meta’s platforms, but have also paid Meta to “boost” their posts to receive more attention from users. The publishers can simply stop using Meta altogether. Meta can only insert themselves as a middleman if the publishers choose to cooperate here. Publishers can very easily come up with their own distribution product if they so choose, but instead, they choose to continue using Meta instead. Kind of a free choice on their part and I hardly see the problem here.

What’s more, the two paragraphs by Sims are contradictory. On the one hand, Sims says that Meta isn’t in the news business. On the other hand, Sims says that Meta is in the news business and is exercising some sort of “superior bargaining power” over the companies. I mean, what is it? Is Meta in the news industry according to you or are they not? Pick one and stick with it.

Sims then said this:

Meta has recently said it will not renew the deals it has done, many of which are apparently now expiring. These deals were entered into by Meta to avoid being designated under the code and so triggering the negotiation/arbitration process. Meta says users are now accessing less news, but it is Meta that determines the accessibility or otherwise of the Facebook News Tab, and its algorithms determine how much media content is in your feed. In response, the government could then designate Meta under the code and require the negotiation/arbitration process to be followed.

Uh, you do realize that what is available on Meta platforms is Meta’s right, right? If Meta chooses not to display a certain kind of content, then tough luck to others, they made their choice. This is a private business we are talking about, they have a right to moderate content as they see fit. You may not like their practices, but that is the choice they are making. There is no law being broken to display news links. What’s more, there is no law being broken by choosing to remove news links on their platform. It’s the same reason I can’t walk into a book store and demand the book store sell a book I wrote, expecting them to just say “yes” no matter what. They can choose to sell the book or not. If the answer is “no”, well, tough luck on my part.

What’s more, the Australian government can choose to designate Meta all it wants. Without news links appearing on the Meta platforms in Australia, the power to negotiate deals that means money flowing to the publishers is non-existent. If the lack of news links isn’t enough to avoid payments, well, Meta can very easily just stop serving Australia altogether.

Sims then says this:

If what has happened in Canada is any guide, Meta might then remove all media content from its feed, which was previously called the “newsfeed”, and also prevent users from sending media articles to one another – all to avoid a process designed to decide fair payment for content.

Meta appears to believe that the government will be so concerned by the prospect of no news on its platform, or that the company will withdraw its products from Australia, that it will back down. While this remains to be seen, this is surely the clear use of Meta’s superior bargaining position.

Uh, no. Sims has clearly misread the situation he finds himself in (or he understands the situation, but is lying about it. Either way works, really.) The simple truth is that Meta has never depended on news link content for their success. If Sims has watched what all was happening in Canada, then he would also know that following Meta dropping news links in Canada, Meta’s traffic remained unchanged. If Meta well and truly depended on news links, then Meta’s traffic would’ve easily suffered as a result.

The results aren’t surprising because we have covered numerous studies that conclude that people use Facebook to communicate with each other and share pictures or video. News links is either a distant third or just part of the added background news. The results of a lack of traffic dropping in Canada pretty much proved those studies correct.

What’s more, it proved what Meta told senators during the Bill C-18 hearings in that news links content is highly replaceable. They didn’t just say it, they ended up proving it. Again, we are conveniently leaving out some pretty crucial facts here.

Of course, the lie from Sims about how this is all just a pressure tactic is a lie I’ve heard here in Canada many times before. When Meta was warning that they would drop news links altogether in Canada, link tax supporters screamed until they were blue in the face that this was all just a pressure tactic. They claimed endlessly about how the threat of dropping news links was just a “bluff” and that Meta would never actually do what they were warning they would do.

When Meta blocked news links, some insisted that it was all a “bluff” and that Meta wouldn’t last a week without news links. Yet, here we are, roughly 8 months later and news links are still blocked. Mysteriously, those claiming this is all a big fancy “bluff” are pretty quiet on that theory as of late (Gee, I wonder why!)

Meta sees little value in news links on their platform. The Canadian experience offered ample proof of this. The moves aren’t being made as a “pressure tactic” to get the government to “back down”, they are dropping news links because retaining them is a colossal waste of time and money for them. Whether the government decides to “back down” or not is of little concern to Meta. If the Australian government wants to set ridiculous rules in their little sandbox, then Meta is just going to take their ball and go home. This is not a complex situation. It really is that simple.

Sims then concludes with this:

The bottom line is Meta wants to use its superior bargaining position to benefit from the content of others without going through a process to determine an appropriate fair payment. The code relies on sound economics to tackle this issue.

There’s… no two ways about it. Sims is a complete idiot. What’s more, his talking points and his own reality bubble are heading into the brick wall of reality. Go ahead and believe hard enough that the brick wall is just a conspiracy put their by Meta. When you crash into it, you’re going to find that your large media company lobbyist pals are going to get hurt by it. We saw this in Canada and Sims is absolutely determined to repeat that history in Australia.

Everyone in the media sector in Australia is going to suffer. All the “believe hard enough” in the world isn’t going to make up for those financial shortfalls. As a Canadian, I’ve seen the bankruptcies that such terrible laws caused. The laws weren’t the sole cause of those bankruptcies, but rather, proved to be the laws straw for those businesses.

So, it seems that Australia is doomed to repeat Canada’s mistakes (ironic given who passed link tax laws first). To Australian’s reading this, when the news links block on Meta happens, well, welcome to the party, pal.

Drew Wilson on Mastodon, Twitter and Facebook.