Facebook versus Australia

Justin Hendrix / Feb 18, 2021

In response to the imminent Australian law that would compel search and social media platforms to pay news organizations, Google has decided to comply with the law by doing deals with major companies such as Rupert Murdoch's News Corp., Nine and Seven West Media. But Facebook has taken the other route available to it- rather than preparing to comply with the law by putting in place commercial arrangements to continue to carry news, the social media giant has blocked users from accessing and sharing Australian news entirely.

Reactions have been swift across the world, as some commentators and officials have pounced on Facebook’s actions as proof of its monopolistic intent and lack of concern for civic discourse. Others blame the Australian government for bowing to the interests of media cronies such as Rupert Murdoch, putting the tech companies in an absurd position. Here are key arguments that have emerged on both sides of the news.

Opponents of the Australian Law:

“The actions we’re taking are focused on restricting publishers and people in Australia from sharing or viewing Australian and international news content,” Facebook said. “As the law does not provide clear guidance on the definition of news content, we have taken a broad definition in order to respect the law as drafted.”

"What the proposed law introduced in Australia fails to recognize is the fundamental nature of the relationship between our platform and publishers…. We pay hundreds of publishers for access to more of their content for Facebook News, a product we're working to bring to more countries this year," Facebook's global head of news partnerships Campbell Brown wrote in a blog post. "Contrary to what some have suggested, Facebook does not steal news content. Publishers choose to share their stories on Facebook."

“Specifically, I am concerned that that code risks breaching a fundamental principle of the web by requiring payment for linking between certain content online,” Tim Berners-Lee told the Australian Senate.

“The concept of paying a very small group of website or content creators for appearing purely in our organic search results sets a dangerous precedent for us that presents unmanageable risk from a product and business-model point of view,” Google regional managing director Melanie Silva said.

“The value exchange between Facebook and publishers runs in favor of the publishers,” William Easton, Managing Director, Facebook Australia & New Zealand wrote in a blog post. “Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.” "This legislation sets a precedent where the government decides who enters into these news content agreements, and ultimately, how much the party that already receives value from the free service gets paid," Easton said. "We will now prioritise investments to other countries, as part of our plans to invest in new licensing news programs and experiences."

“By giving up the fight over Australian news, Google and Facebook are able to focus their efforts on maintaining their monopolistic positions in the far larger markets for online information, and data about everyone who uses the web,” wrote Bloomberg opinion columnist David Fickling.

“I wish Australia would take Facebook’s rejection as a sign it should rethink its approach to media regulation entirely. It could just tax companies based on their revenues, for example. It could earmark those revenues to support journalism — nonprofit public media, even, which has consistently been shown to have powerful civic benefits. Or it could pursue a bargaining code that requires big media conglomerates to create and support jobs in journalism, rather than simply accept tens of millions of dollars and spend them however they like — or just return it to shareholders. In reality, though, none of that seems likely to happen. Google’s capitulation means that Australian crony capitalism is now likely to be exported worldwide. Legacy media outlets will become richer — and also more dependent on the tech giants that they excoriate daily for having too much power over them. All the while, the media industry will continue to consolidate, and it will be harder to get or keep a job in journalism,” wrote Casey Newton in Platformer.

“In the end, regulation that tries to take power away from platforms inevitably gives them more. In Europe, under the Right to be Forgotten, Google decides what we may remember. In Germany, under NetzDG, Facebook decides what speech is illegal, outside a courtroom. Now in Australia, Google decides which news organizations should get money. Small sites and startups will suffer for this is a power game; more money goes to the more powerful. I do not think Google cares much about news. There will not be much traffic to its News Showcase. The CPM cost of this -- if we knew the amount -- would doubtless be extraordinary. This is not a payment for news. It is baksheesh paid to Murdoch, demanded by his bagmen, the politicians in his pocket. What also disturbs me is that news organizations, which lately turned from utopian in their coverage of technology to dystopian, never reveal their own conflict of interest in their coverage of the net and its current proprietors. The moral panic in media coverage serves media's ends as this episode sorely demonstrates. Let us be quite realistic about the use of these funds. It will not go to journalists. It will not improve news. It will go to the rapacious owners and hedge funds that control news companies. Now Facebook: There are two interpretations. The positive one is that Facebook stood on principle, decided not to cave in to Murdoch's blackmail (or not again as Zuckerberg already presented a check to News Corp's Robert Thomson in New York a year ago), and defended the sanctity of the link on the net. The cynical interpretation is that news is a damned pain in the ass for Facebook and this moment allows them to return to a Facebook devoted to puppies, parties, and getting laid. We shall see. I worry, though, about what will happen when your Australian uncle Joe shares disinformation and you are not allowed to combat that by sharing news. I do hope researchers study the impact," wrote Jeff Jarvis in CJR’s Galley.

"The ban has been badly implemented: it has led to performative outrage at the apparent censorship from the outlets themselves, and has clumsily also included official government agencies and some of Facebook’s own pages.The backstory is one playing out across the world: media outlets are struggling to make as much profit as once they did in the internet era. Newspapers used to be the best place to look for a house, to buy a second-hand car, and even to date. The internet has supplanted papers for all of those tasks, and newspaper owners didn’t wake up to it early enough. Their management model of relentless cuts to extract maximum profits then did not allow the people who did see it coming to actually invest and build the new era of online classified ads. Faced with that kind of failure, bosses are now blaming the tech giants. While often still extracting profits (by grinding down quality, treating workers badly, and then blaming ‘the internet’ when people stop reading the content that’s left), newspaper proprietors across the world are using their remaining clout to try to persuade their respective governments to make tech giants pay for using their content,” wrote James Ball in The Spectator.

“This isn’t a byproduct of the deal, it’s the point. Big, legacy news orgs win & the rest will fight among themselves about who is big enough & influential enough & connected enough to eek out a little scratch. It's getting harder than ever to build digital audiences,” tweeted Ned Berke, VP of Audience at Blue Lena LLC.

“I don't think we'll see any impact whatsoever on the ability of local news organisations to stay in business and keep journalists employed to cover local news,” said Aaron Pilhofer, James B. Steele Chair in Journalism Innovation at Klein College of Media and Communication at Temple University.

Opponents of Facebook's action

“Facebook was wrong. Facebook’s actions were unnecessary. They were heavy handed and they will damage its reputation here in Australia,” said Australian Treasurer Josh Frydenberg said at a media briefing on Thursday.

“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 said in a Facebook post.

“Facebook is severely restricting the flow of information to Australians…. This is an alarming and dangerous turn of events. Cutting off access to vital information to an entire country in the dead of the night is unconscionable,” said Elaine Pearson, Australia director at Human Rights Watch.

“I think Facebook has lost the PR battle by enforcing a ban that’s just simply too wide,” said Tama Leaver, a professor at Curtin University’s School of Media, Creative Arts and Social Inquiry.

Lisa Davies, editor of The Sydney Morning Herald, wrote on Twitter that "Facebook has exponentially increased the opportunity for misinformation, dangerous radicalism and conspiracy theories to abound on its platform."

"Despite key issues such as the COVID-19 pandemic having ongoing effects on all Australians, Facebook has today removed important and credible news and information sources from its Australian platform," David Anderson, Australian Broadcasting Corporation's managing director, said in a statement.

"It's not about the money. It's about the fact that Facebook wants to maintain its powerful position everywhere in the world," University of Virginia scholar Siva Vaidhyanathan said of Facebook's resistance. He told NPR the social network's action shows it wishes to "continue to build their fortunes off the work of others."

"It is kind of a stark reminder of the control that they have over what people see and obviously with respect to people who use Facebook as their primary source of news," Enrique Armijo, a fellow at Yale Law School's Information Society Project, told NPR.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press," Microsoft President Brad Smith wrote in a blog post. "It should copy it instead."

“Google have been prosecuting an argument that they’re being asked to pay for links in Search and that is not the case,” Dan Stinton, managing director of Guardian Australia and New Zealand said. “They’re not stealing published content, but I do believe they are using their market power to preference their own businesses to the detriment of publishers and that’s not right...”It’s not just paying for links and snippets within search, it’s paying for the entire benefit that Google receives,” he added.

The Guardian reports that the Australian federal communications minister, Paul Fletcher, warned that companies that operate in Australia “need to comply with the laws passed by the elected parliament of this nation”.

“Facebook is entirely within its rights to remove any /all links and pages from its platform so it doesn’t have to pay a link tax on news.(Even though it already does exactly this for news tab, which is ad hoc and discretionary). But the manner and timing of the removal was potentially damaging, and reckless. It removed many items that were not news (like healthcare sites, community pages) and news that is a long way outside the corporate media - eg half all pages in First Nation media network,” said Emily Bell, director of the Tow Center at Columbia Journalism School.

News Corp Australasia executive chairman Michael Miller said Facebook’s move “clearly encourages fake news over reliable news and demonstrates the extraordinary market power Facebook holds”.

“Facebook will now be a platform for misinformation to rapidly spread without balance,” Australian publishing company Nine said in a statement. “This action proves again their monopoly position and unreasonable behaviour.”

“Facebook blocking health information in the middle of a global pandemic is utterly irresponsible. Mark Zuckerberg, a mega-billionaire is censoring what news and information Australians can access,” said Sarah Hanson-Young, Senator for South Australia.

“This action - this bully boy action - that they’ve undertaken in Australia will I think ignite a desire to go further amongst legislators around the world,” the head of the British parliamentary committee overseeing the media industry, Julian Knight, told Reuters.

Henry Faure Walker, chairman of Britain’s News Media Association industry group, told Reuters that removing news during a global pandemic was “a classic example of a monopoly power being the schoolyard bully, trying to protect its dominant position with scant regard for the citizens and customers it supposedly serves.”

“I have no idea what Facebook’s algorithm would be that someone like me would be targeted,” Marcey Papandrea, a media entrepreneur who used Facebook to drive traffic to her project, Super Network- where she posts movie reviews and podcasts- told The Wall Street Journal. “At the end of the day, this is like a mudslinging contest.”

"This has been a passionate cause for our company for well over a decade and I am gratified that the terms of trade are changing, not just for News Corp, but for every publisher," News Corp CEO Robert Thomson said in a statement. "For many years, we were accused of tilting at tech windmills, but what was a solitary campaign, a quixotic quest, has become a movement, and both journalism and society will be enhanced."

“Wow, Facebook, you have no conscience. To protect yourself in Australia, you shut down ALL news sites, inc @rapplerdotcom. Yet you allow govt propaganda sites that journalists risk their lives to fight to post! If you don't fix this, that will have an impact on 2022 elex,” tweeted Maria Ressa, CEO of Rappler.

“Some have argued that the Australian government’s law is nothing more than a shakedown driven by Rupert Murdoch, whose malignant silhouette looms even larger across the Australian media landscape than it does the American. That’s partly true. It is hard to imagine the Murdoch-backed Coalition government enacting this sort of thing at anyone else’s behest. In fact, early drafts of the bill left Murdoch’s lifelong nemeses, the public broadcasters, out in the cold. But the current legislation has the support of all major media companies, large and small, public and private. It’s also backed by the majority of Australians,” wrote Dan McGarry, Former Media Director of the Vanuatu Daily Post.

“We are extremely concerned by Facebook’s choice to hinder Australian access to critical emergency, health and science information during peak bushfire season & a pandemic," tweeted the Australian Academy of Science.

“If it is not already clear, Facebook is not compatible with democracy. Threatening to bring an entire country to its knees to agree to Facebook’s terms is the ultimate admission of monopoly power,” tweeted US Representative David Cicilline.

"We have seen different search engines come and go over the years, once upon a time we all had Internet Explorer, we all had MySpace” said Australian shadow communications minister Michelle Rowland. "[The ban] has called into question is this the beginning of the end of Facebook? … The reason why Facebook is able to act in this way it is because it enjoys substantial market power.”

“Their unwillingness to fairly compensate trusted news organizations speaks volumes about their commitment to protecting democracy,” said Jason Kint, CEO of Digital Content Next, a US trade association for online publishers

Other perspectives fall outside these frames, and are concerned with the implications and key questions about how the exchange of value contemplated by the law will work.

“The reason it’s such as ephemeral process, if you like, is that no one’s ever tried this before,” Peter Lewis, director of the Australia Institute’s Center for Responsible Technology said. “How do you value fact-based news absent advertising? News has always been valued on the back of how much ads that the outlet can sell. Because Google and Facebook have dominated the advertising market and taken that out of the equation, we’re now trying to work out the value of public interest journalism.”

“The Journalism Competition and Preservation Act was backed by several news publishing groups including the American Society of News Editors and the National Newspaper Association as well as press associations throughout country when it was first introduced in 2019,” reports Digiday.

“What people miss is the big national publishers already have some leverage today, so the question is how do you get leverage to small publishers, and I don’t understand how you would do that outside some kind of bargaining code that ensures they’d be included,” said David Chavern, president and CEO of the News Media Alliance.

"Any monies from these deals need to end up in the newsroom, not the boardroom," said Marcus Strom, president of the Media, Entertainment and Arts Alliance, the union for Australian journalists. "We will be pressing the case for transparency on how these funds are spent."

This piece will be updated.


Justin Hendrix
Justin Hendrix is CEO and Editor of Tech Policy Press, a new nonprofit media venture concerned with the intersection of technology and democracy. Previously, he was Executive Director of NYC Media Lab. He spent over a decade at The Economist in roles including Vice President, Business Development & ...