Facebook said Australian users will be blocked from sharing Australian or international news content on the social network.
Reacting strongly to the Australian government’s new code that require digital platforms to pay news publishers for content, Facebook said it will be restricting users in the country from sharing or viewing news links on its platform. Facebook’s action will however have ramifications for global users and publishers as the social network is a key tool for businesses and individuals to reach out to audiences worldwide. More importantly, digital platforms fear that the action in Australia could trigger similar laws across the world – causing havoc to their businesses.
What’s the fuss over Australian govt’s new code?
There have long been concerns about the market dominance of tech firms over media organizations. While Google is the dominant search engine in Australia, Facebook ranked top as a social media news source, followed by YouTube and Facebook Messenger. Reuters Institute Digital News Report 2020, reveals that 52% of Australians questioned in a survey used social media as a source of news.
In 2018, an Australian government regulator launched an inquiry into the impact of Google and Facebook on competition in media and advertising found an imbalance of power between tech firms and the media – a reason why the government recommended introducing a code of conduct that it said would level the playing field.
In mid-2020, the Australian government unveiled a draft law to enforce the code, and calls on tech companies to pay for content, primarily targeting at Facebook and Google. It was then that Facebook and Google wanted to withdraw services from the country.
The government argued that tech giants should pay newsrooms a “fair” amount for their journalism. In addition, it calls for financial support that’s needed for Australia’s struggling news industry. Media companies, including Rupert Murdoch’s News Corp Australia, have lobbied hard for the government to force tech firms into negotiation amid a long-term decline in advertising revenue, according to a BBC report.
It needs to be mentioned that Microsoft too has shown its support behind the proposed law. “The code reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses,” the software firm said.
William Easton, Managing Director, Facebook Australia & New Zealand however said in a blog post, “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.”
What it means for users and publishers?
Across the world, publishers have used Facebook as a means to reach out to audiences who use it as a content consumption platform, thus increasing their reach and revenues. Many also have commercial agreements with Facebook to host their content on the social network in the form of Instant Articles that open faster than publisher pages.
Arguing that the new laws will work against the publishers, Easton said, “Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.”
A research on analytics site Similarweb also showed showed that top Australian news sites like Sydney Morning Herald, News.com.au, and The Australian were all getting 7-9% of their traffic from social, which is usually driven primarily by Facebook. With the new Facebook move, most of this traffic, and revenue, will vanish.
However, Easton clarified that for Facebook, the business gain from news is minimal. News makes up less than 4% of the content people see in their News Feed.
Why Google takes a ‘different’ approach?
Facebook and Google have fought hard to prevent the Australian law and earlier Google too threatened to remove its search engine from Australia if the proposed law is passed.
In contrast to Facebook’s reaction, Google went into a three-year global agreement with Rupert Murdoch’s News Corp. to pay for the publisher’s news content. Don Harrison, president for global partnerships at Google, said that “the company had invested to help news organizations over the years and that it hoped “to announce even more partnerships soon.”
However, Easton brings a distinction between how news content was shared on Facebook by users versus Google, where the content is curated through algorithm. “Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content. On the other hand, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue,” he wrote in the blog.
What it means for the World?
Although Australia is a small market, this could be a test case for bigger global push to force internet giants to share some of their revenue with content providers, reported Reuters.
The news site said platforms such as Google and Facebook have been hoarding the vast bulk of new revenue as media shift online, even as newspapers, magazines, TV and radio stations and websites are forced to shut newsrooms around the world, including India, where companies like Google and Facebook have a stronghold.
Facebook’s reaction to pull off from one market therefore created disappointment to a section of media, politician and analyst. As Australian Senator Rex Patrick said that it is going to go worldwide. “Are you going to pull out of every market, are you?” he told reporters.
The reason for the annoyance was more because Facebook wiped out pages from Australian state governments and charities as well as from domestic and international news organisations, three days before the launch of a nationwide COVID-19 vaccination program.
“Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing,” Australian Prime Minister Scott Morrison wrote on his own Facebook page.
“These actions will only confirm the concerns that an increasing number of countries are expressing about the behavior of Big Tech companies who think they are bigger than governments and that the rules should not apply to them.”
The head of the British parliamentary committee overseeing the media industry, Julian Knight, said the message was aimed far beyond Australia. “This bully boy action that they’ve undertaken in Australia will I think ignite a desire to go further amongst legislators around the world,” Knight told Reuters.
News publishers saw Facebook’s tactics (which also owns Instagram and WhatsApp) cannot be trusted as the gatekeeper for their industry.
There are similar issues happening in Europe, although not identical. A new EU rule on copyright says that search engines and news aggregators should pay news sites for links. In France, publishers recently entered into a deal with Google on how that should work. But only a handful of such deals have been signed with notable French newspapers – making it a very different thing than the wide-ranging, much stricter Australian plans.
And there have been other areas of tension between governments and big tech firms, where governments or bodies such as the EU have looked into regulating the big techs.
Facebook however is undeterred. As Easton wrote, “Our global commitment to invest in quality news also has not changed. We recognize that news provides a vitally important role in society and democracy, which is why we recently expanded Facebook News to hundreds of publications in the UK.”