Recent years have seen an increased examination of the role of social media in influencing society, democracy, and political discourse due to its easy accessibility and unparalleled reach. Whether it’s the United States (US) or Myanmar, governments have grown highly concerned about the power of platforms like Facebook (FB), Google, and Twitter in informing and shaping public opinion, and have called for higher regulations on such companies to help address challenges like the spread of harmful (mis)information and hate speech. Given their billion-dollar revenues, digital giants and other big tech businesses have also come under scrutiny for hogging up market share and potentially violating antitrust laws by acquiring, copying, or killing their competitors.
Unsurprisingly, such firms have been heavily resistant to any kind of oversight or government-imposed restrictions on their operations. Facebook made this crystal-clear last week when it decided to ban all news content from its site across Australia, in protest of the country’s new Media Bargaining Code, which would compel digital companies to pay publishers for using their news stories. The proposed law, which is likely to be adopted this week, is aimed at both levelling the playing field due to Google and Facebook’s market monopoly and protecting public interest journalism. Because these platforms dominate online advertising revenues linked to news reports (with no revenue-sharing mechanisms in place) the new rules will require the sites and publishers to come to a payment agreement between themselves or through an arbiter, or else face significant penalties.
Though both companies had originally expressed fierce opposition to the legislation, Google ultimately gave in and has already inked multi-million dollar deals with various media houses, including Rupert Murdoch’s News Corp, and Seven West Media. Facebook, however, took a more radical stance and took down all news content from its platform. Now, users can no longer share links to Australian news sources on their profiles, Australian media companies cannot post any of their content on their pages, and Australian users cannot share any news links at all, local or international.
Facebook’s Managing Director for Australia and New Zealand, William Easton, explained the company’s decision in a post, saying: “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.” He further stated that Facebook’s relationship with the news was “fundamentally different” than that of Google, which is why it reserved the right to respond to the legislation accordingly. “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 said.
Easton argued that the current system in fact works in favour of the news organisations, since Facebook lets them use its services and post links to their articles for free, which helps direct traffic to their websites. Total traffic to the Australian news sites from various platforms fell from the day before the ban by around 13% within the country. “Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million,” he said while noting that the company itself stands to gain very little from news, which apparently makes up for “less than 4% of the content people see” on their feed. “Journalism is important to a democratic society, which is why we build dedicated, free tools to support news organisations around the world in innovating their content for online audiences,” Easton added.
Despite his attempts to portray Facebook as the noble do-gooder, what Mr. Easton failed to acknowledge was the vast disparity in the revenues earned by Facebook from ads versus news outlets. According to an Australian Competition and Consumer Commission (ACCC) report released in October last year, “for a typical $100 spent by advertisers in 2019, $53 to Google, $28 to Facebook and $19 to all other websites and ad tech.” This dominance was an important factor in the ACCC’s recommendation to institute the media bargaining law in the first place.
Regardless, Facebook’s dramatic “my way or the highway” approach to the issue was not a good look. What made it worse was the way it was implemented—the company gave no prior warning of its decision and applied the ban so haphazardly that it blocked many innocent bystanders in its way, including charities, humanitarian organisations, and government agencies, including health sites, which was especially harmful since it came on the eve of the country’s vaccine rollout. The company, which has consistently come under fire for allowing misinformation about politics and COVID-19 fester on its site, was further chided for its irresponsible move of wiping out legitimate information sources from its platform, which critics said would only worsen the problem, given the sheer number of people who use the site as their primary source of information. In fact, according to Statista, as of February 2020, 52% of Australian adults used Facebook as their main source of news.
Although Facebook ultimately restored the pages that were inadvertently hurt by the ban, such as those run by the Bureau of Meteorology (BoM) and the state health departments, the company’s actions drew harsh criticism from the Australian government, who said that its chaotic show of strength would only draw in more scrutiny and calls for regulation—not on Facebook’s terms, but on those of national authorities.
Australian Prime Minister Scott Morrison accused Facebook of “unfriending” Australia, and said that its move would only make his administration more willing to pass the law, since it has confirmed fears that big tech companies think “they are bigger than governments and that the rules should not apply to them.” Health Minister Greg Hunt also said in a press conference over the weekend that while the government will post details about important national issues like the vaccine rollout on its FB page, it will not use paid advertising to boost that information.
For a company that took on this endeavour to avoid government interference in its affairs, this is certainly not good news. However, Australian authorities said on Friday that Facebook was at the negotiating table for talks over the weekend to chart out a way forward. On Tuesday, Facebook announced that it was ending the news ban, after confirming that it had come to an agreement with the Australian leadership that would see four new amendments to the proposed media code. The changes would give digital platforms notice before they are formally designated under the code, which would give companies time to negotiate agreements by themselves before being forced into binding arbitration arrangements. The government could also choose not to apply the law to Facebook if it can demonstrate a “significant contribution” to local journalism.
Facebook said it favoured the deal, as it allows the company to exercise discretion in terms of which publishers to support, including small and local ones. “We’re restoring news on Facebook in Australia in the coming days. Going forward, the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation,” said Campbell Brown, Facebook’s vice president for news partnerships.
Though this compromise will most likely be portrayed as a victory by both sides, there is no doubt that this whole episode has damaged Facebook’s standing. Politicians around the world have expressed support for the Australian government and have vowed to counter this culture of arm-twisting by the social media network.
Rep. David Cicilline, a Rhode Island Democrat who heads a US House subcommittee that has urged antitrust action against Facebook took to Twitter to express his dismay at the platform’s move. “If it is not already clear, Facebook is not compatible with democracy,” he said, adding, “Threatening to bring an entire country to its knees to agree to Facebook’s terms is the ultimate admission of monopoly power.” Just hours after Facebook announced its news ban, US legislators announced they would hold new hearings to curb online platforms and update antitrust laws. Similarly, Canada, France, UK, and the European Union have said that they are looking to follow Canberra’s footsteps, and enforce new tough data and tech laws, to keep digital giants in check.
Australian Treasurer Josh Frydenberg—who will play a central role in implementing the new media legislation—said that the country’s face-off with Facebook had served as a “proxy battle” for the rest of the world on the regulation of big tech firms. “I have no doubt that so many other countries are looking at what is happening here in Australia, because of this innovative code the Morrison government is now pursuing, so Facebook and Google have not hidden the fact that they know that the eyes of the world are on Australia, and that is why they have sought to get a code here that is workable,” he said.
Facebook vs Australia, Explained
Facebook banned all news content from its site across Australia last week to protest the country’s new Media Bargaining Code, which would compel digital giants to pay publishers for using their news.
February 24, 2021
SOURCE: MIKE BOWERS/GUARDIAN/NICK WASS/AP