Facebook and the news after Australia: What happens now? - Columbia Journalism Review

By Mathew Ingram

February 25, 2021

The Australian version of Facebook got decidedly less newsy a week ago, after the company blocked Australian news outlets from posting their stories to its platform, and regular users in that country from sharing news from any media outlet anywhere in the world. ( Traffic to Australian news sites fell by as much as 20 percent, according to Axios.) This move came in response to a new law that requires large platforms like Facebook and Google to pay for every news article carried on their networks, something that both companies objected to . To critics of the company, including some members of the government, the move was another sign Facebook has too much power and needs to be regulated. To defenders of the open internet, including World Wide Web creator Sir Tim Berners Lee, it was a sign of how governments are over-reaching when it comes to legislation aimed at curbing platform power and/or funding journalism.

Facebook finally said Monday that it was removing the block on sharing in Australia, as a result of amendments to the law. But the war itself shows little sign of stopping. If anything, Australia’s pressure on Google and Facebook, and the resulting settlement with the latter — as vague as it may be in practice — only seems to have increased the interest other countries have in trying to repeat Australia’s measures. (Microsoft is also trying to help push this kind of legislation, likely for competitive reasons .) 

Though citizens lost the ability to post news for a few days, media companies are likely to get a windfall as a result (broadcasters like Seven and Nine have already gotten $30 million each from Google). Facebook has committed to investing more than $1 billion in the media industry worldwide over the next three years . Canada has said it is interested in pursuing legislation similar to that proposed by Australia, and legislators in the European Union seem similarly enamored of the code and its ability to squeeze the platforms.

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The Australian law is a tougher version of legislation introduced in France and Germany several years ago, after the passage by the EU of new copyright rules on what are called “neighboring rights,” which apply to aggregators like Google News . The French and German variations of those laws have had mixed results, in part because they are difficult to enforce. In France earlier this week, antitrust regulators released a report that accused Google of failing to comply with the rules requiring it to hold talks with publishers over payment for their content. The search giant signed a three-year deal worth $76 million with a number of French publishers earlier this year, but some smaller news outlets were not included in the deal. According to regulators , Google failed to hold talks with those other publishers “in good faith” to find an agreement on payment. This helps explain why Australia’s version of the same legislation imposes mandatory binding arbitration if a platform fails to hold negotiations with a publisher after a certain period of time.

Indeed, the binding arbitration requirement was one of the aspects of the Australian code that Google and Facebook most objected to . The clause states that if the companies don’t hold talks in good faith, they will be forced into arbitration with someone of the government’s choosing, who will then have the ability to name a price the platforms will have to pay . One of the amendments that got Facebook to drop its news ban gave the company an extended time period in which to reach deals with news publishers before the forced arbitration clause was triggered. More important was the government concession that Facebook would only have to sign bulk deals with news publishers , not pay for every piece of news shared by anyone on its platform. And if it signs enough deals — the strategy that Google chose to follow from the beginning — then the suggestion is that the other aspects of the proposed legislation (which required things like 30 days notice of changes to the recommendation algorithm) will no longer apply.

Australia may feel that it emerged victorious from the battle with Facebook — after all, even after capitulating to Facebook’s brinkmanship, the country’s news publishers are now going to get cash payments from the social network and from Google, which was the goal of the proposed legislation. And that will no doubt embolden other countries to pursue similar campaigns. But many questions remain unanswered. Even if we assume that Google and Facebook bear some responsibility for the decline of the media industry ( which some believe is a stretch ), if governments want to support journalism financially, why not impose a straightforward tax on the platforms, or on digital advertising, instead of using copyright as a back door? And if the bulk of the payments from the platforms go to established media outlets like those run by Rupert Murdoch — who controls a large proportion of the Australian press, and is widely seen as the impetus behind the legislation — what happens to smaller, independent news publishers?

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Has America ever needed a media watchdog more than now? Help us by joining CJR today. Mathew Ingram is CJR’s chief digital writer. Previously, he was a senior writer with Fortune magazine. He has written about the intersection between media and technology since the earliest days of the commercial internet. His writing has been published in the Washington Post and the Financial Times as well as by Reuters and Bloomberg.

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