And why Google is actually going to pay news publishers.
If you’re an Australian Facebook user who loves to share the news on your timeline, you may have noticed something different recently: You can’t.
Australia is on the cusp of passing a law called the News Media and Digital Platforms Mandatory Bargaining Code, which would force Facebook and Google to pay publishers if they host their content. The law is a response to years-long complaints from news outlets around the world about the role that Google and Facebook — and their mammoth digital ad businesses — have played in the decline of journalism and the decimation of its business model in the internet age. The two companies have responded in different ways: Google is making deals with Australian news publishers; Facebook is cutting them off entirely.
Based on reasoning that the law won’t apply to it as long as news links can’t be shared on its platform, Facebook has banned all users from sharing links to Australian news sources; Australian publications’ pages from hosting any of their own content at all; and Australian users from sharing any news links at all, Australian or international.
Facebook also seems to be blocking anything it thinks is an Australian news source — which currently includes several sites that are decidedly not news outlets. There were reports of government pages being restricted, for example. (Also, bike trails.)
The overzealous ban, however, was apparently intentional and maybe even a little bit punitive.
“As the law does not provide a clear guidance on the definition of news content, we have taken a broad definition in order to respect the law as drafted,” Facebook told Recode. “However, we will reverse any Pages that are inadvertently impacted.”
Australian Prime Minister Scott Morrison said Facebook’s move would only make his government more determined to pass the law — and might encourage a few other governments to do something similar.
“Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing,” Morrison wrote in a Facebook post. “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.”
He added: “We will not be intimidated by BigTech seeking to pressure our Parliament as it votes on our important News Media Bargaining Code.”
The law Facebook hates but Google is learning (and paying) to live with
The proposed law — which looks likely to be passed — says that digital platforms like Facebook and Google have to pay news organizations if their content is featured on those platforms, like in Google search results or Facebook shares. Google and Facebook are the only two companies that would be subject to the law currently, but it could also apply to any other digital platforms designated by the government. The platforms and the publishers have to come to a payment agreement, or else go before an arbiter who will decide a fair price for them that they will have to pay, or else face significant penalties.
Google and Facebook, who dominate a digital ad business that pays them billions of dollars while news organizations go bankrupt, have been vehemently opposed to the law. Over the last several months, both have threatened to take their services away from Australians if it were to pass.
In the end, Google blinked. The search giant has already started working out payment deals with Australian publications. On Wednesday, it announced a deal with Rupert Murdoch’s News Corp. Murdoch, Australia’s exceedingly rich and powerful news magnate and native son, has been very vocal about wanting a law that forces digital platforms to pay his publications, and he may well have influenced the country’s decision to move forward with this law.
News Corp now has a multi-year deal with Google. Terms were not disclosed, but the New York Times reported it was worth tens of millions of dollars. Google also made a deal with Australia’s Seven West Media and has agreed to work out licensing deals with French publications as France considers a similar law.
Facebook, obviously, took a different tack. If Australians can’t share news links, and Australian news organizations can’t post their own content, then Facebook believes Australia’s law won’t apply to it — after all, there’s nothing to pay media companies for. But there’s also no law in place yet. Facebook cut Australian news publications off before it really had to, which gives them, their government, and their readers a taste of what’s to come if the media law goes through. Facebook may be hoping that a preview of the platform without Australian news will make lawmakers more amenable to passing a version of the law that Facebook prefers.
Facebook might be in the right here, depending on whom you believe
While some have cheered Australia’s move, reasoning that anything that gets tech companies to pay news organizations back for the content (or ad dollars) they’ve used to build their own platforms, other media analysts believe the law is a case of the government forcing companies to pay other companies — specifically, those owned by one of that government’s richest and most influential (former) citizens. What was well intentioned may end up only making rich people even richer, with little benefit to anyone else.
Journalism professor Jeff Jarvis called the law a case of “media blackmail” and said Google had “caved” to “the devil Murdoch.” Facebook, on the other hand, either “stood on principle” or just decided news content for Australian users wasn’t worth enough to the company to have to pay for it.
Facebook said on Wednesday that it doesn’t think the law “recognizes the realities of how our services work.” The social network believes that it’s actually the publishers that benefit from Facebook, not the other way around.
“Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million,” Facebook said (take those figures, which have not been independently verified, with a very large grain of salt). And Facebook apparently barely needs news articles, which the company says makes up “less than four percent of the content people see in their News Feed.” That might be because Facebook has, in recent years, intentionally de-emphasized news links in News Feeds in favor of posts from friends and family, and removed the “Trending” box that featured links to news articles.
In fact, Facebook said, it lets news organizations use its services for free, posting links to their articles for Facebook users, who then click on those links and give those news organizations precious traffic. What Facebook didn’t say was that this traffic isn’t worth nearly as much to those publishers as it could be, because Facebook and Google control the majority of the digital ads market and make most of the money from it, rather than the outlets whose content those ads are posted on. This is why Australia wants to force them to pay those publishers fairly in the first place.
Facebook claims that it’s not opposed to paying news organizations and had wanted to launch in Australia Facebook News, a platform on which the company would pay publishers to license their content, as it’s already doing in the United States and the United Kingdom. Those deals would, of course, be on Facebook’s terms. The company doesn’t like being regulated, so it’s cut Australia off before it can be.