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Possible implications of Australia’s big tech news ban

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Australia has hit international headlines for a few reasons in the last six weeks, which could have big implications for technology and the financial markets.

On 21 January, Google threatened to withdraw its services from the country, including its eponymous search engine. The announcement came following attempts by the government to get Google to share royalties with online news sites. It didn’t go down well with the tech companies who were saying last week that the implementation of the law would result in them revoking services in the country. Despite this, Prime Minister Scott Morrison said that they wouldn’t succumb to such “threats”. The government has since proceeded to pass legislation that will see tech-giants like Facebook, Google, and even Twitter pay the media platforms for allowing their content to be shared.

Facebook did reverse its decision after negotiating with the government and ahead of the law. However, its initial reaction could be indicative of how things could play out in other countries considering similar measures.

The financial markets

This creates a climate of uncertainty around Google and other impacted brands. Considering their global dominance and the seemingly unshakeable success they have globally, could this impact stock values? The answer is yes. Not only this, but high royalty bills could impact their ability to expand or offer new services and products. If laws like this happen elsewhere, they may even have to reconsider their business models and how they are monetized.

That isn’t necessarily bad news for investors. At a time like this, it might not be smart to buy actual stocks, but that doesn’t mean traders can’t enjoy and benefit from market volatility. CFD trading allows speculation on the increase and decrease of stocks during a set period of time. This means that investors can profit whether the price goes up or down, without needing to purchase the underlying asset. Considering that investor interest in Google and Facebook is high consistently, this is a great way to capitalise on recent developments and future consequences.

Why are these developments so key for these corporations? Australia isn’t Google or Facebook’s biggest market, but it could still impact their way of doing business. If they were to entertain the notion of paying royalties, as Australia requires, they would incur significant costs. This could reach hundreds of millions or even billions of dollars every year. Now imagine if this started happening in other countries as well. The cost of operating would be significant and Google would have to look at other operating models to compensate for the loss.

Unhappy users

Facebook users were also unhappy, as the move left them unable to share news items to their feeds. Anyone trying to share a story from a media platform found they were unable to do so or the story just displayed as a blank box. Some called it a direct attack on media freedom, depriving people and media of one of the most useful ways of disseminating news. Others said it was an attack on the open and free nature of the Internet and was setting a dangerous precedent for other countries, including those with already repressive regimes.

There has been much talk about governments moving to regulate big tech but Australia is the first to do so. It remains to be seen who will win the battle between tech and politics in Australia. One thing’s for sure, if politics win, this could have serious implications for the Internet around the world.

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