Facebook on Wednesday announced that it would restrict publishers and people in Australia from sharing or viewing news content on the platform, in response to the country’s proposed Media Bargaining Law that mandates tech companies to pay publishers for linking articles on their platforms.
Interestingly, Facebook’s decision came hours after Google softened its earlier stand and agreed to pay a few publishers.
“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content. It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter,” said William Easton, Managing Director, Facebook Australia & New Zealand, in a statement.
Australian PM weighs in
Australian Prime Minister Scott Morrison responded saying, “Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing,” he wrote on Facebook.
“These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them. They may be changing the world, but that doesn’t mean they run it. We will not be intimidated by BigTech seeking to pressure our Parliament as it votes on our important News Media Bargaining Code,” he added.
A brewing standoff
Facebook’s decision is the latest development in the ongoing standoff between tech companies and the Australian government – and other countries. As the pressure from the Australian government grew over the recent months to pay the publishers, Facebook proposed to ban news on the platform whereas Google warned of pulling out entirely from Australia. Google, however, later reached an agreement with a few news publishers.
At the crux of this standoff and many others before it, lie the concerns about the market dominance of tech firms over media organisations. For example, according to the BBC, of every A$100 (£56; $77) spent on digital advertising in Australian media, A$81 goes to Google and Facebook. Publishers have time and again complained about unfair compensations for their articles, whereas the tech giants have argued it is unreasonable as they were merely being conduits to disseminate content.
Google’s deal with NewsCorp and others
Google struck a deal with Newscorp whereby the parties agreed on a three-year deal in which Google would pay Newscorp to feature its publications like the Wall Street Journal, the Times and the Australian in Google’s News Showcase product. Apart from NewsCorp, TV networks such as Seven West Media and Nine Entertainment too have agreed to be featured in Google’s News Showcase.
While news publishers, legislators and supporters of the proposed law view it as a much-needed measure to ‘protect public-interest journalism’, Facebook has been arguing that its business gain from news, which made up less than 4 per cent of the newsfeed, was minimal. According to Easton’s statement, Facebook generated 5.1bn free referrals to Australian publishers worth an estimated AU$407m (£228m, US$315m).
Within hours of Facebook’s announcement, pages of Australian news sites went blank. Among those affected were also several official health pages and charity/NGO accounts. By Thursday noon some of the pages were restored although all media accounts remained in the dark.
The bigger picture
The question remains how this will reverberate around the world and what comes next. It’s worth noting that Microsoft has publicly supported the proposed law in Australia, perhaps angling for what could come down the road.
And there are different yet similar standoffs taking place in Europe: the new EU rule on copyright that says search engines and news aggregators should pay news sites for links. Quite recently, French publishers came to terms with Google on this. But that was with some French papers and not nearly on the scope of the Australia situation.
Whatever the case, the tension between tech firms and publishers just spiked.
Update Thursday 25 February 2021 – the Australian Parliament passed final amendments to the so-called News Media Bargaining Code agreed between Treasurer Josh Frydenberg and Facebook chief executive Mark Zuckerberg on Tuesday. In return for the changes, Facebook agreed to lift its ban on Australians accessing and sharing news. Australian authorities introduce four further amendments, including one that means the government may not apply the code to Facebook if it can demonstrate a “significant contribution” to local journalism. They include a two-month mediation period before government-enforced arbitration kicks in – giving parties more time to reach a private deal. The rest of the law had passed in Parliament earlier, so it can now be implemented while both Google and Facebook are pursuing Australian media deals under their own licensing models, Google News Showcase and Facebook News.