A law that would require some tech companies to pay news publishers is making waves around the world.
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.
In the next few days, though, things should go back to normal. Less than a week after suddenly banning news links for Australian users and shutting down Australian news pages to protest an upcoming law, Facebook says it’s gotten reassurances from the Australian government that it won’t be forced to pay publishers but will instead be given the chance to negotiate agreements with them — which it’s already starting to do. According to the Sydney Morning Herald, Facebook has agreed to pay the major Australian media company Seven West Media for news content and is in negotiations with another called Nine Entertainment.
Australia has now passed the News Media and Digital Platforms Mandatory Bargaining Code, which could 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 responded to the then-potential law in very different ways: Google made deals with Australian news publishers; Facebook decided to cut them off entirely.
After a few days of Australians seeing what Facebook was like without the news, a sizable amount of worldwide backlash against the company, and talks with the Australian government that resulted in a few last-minute changes to the law, Facebook decided that the new terms were good enough for its ban to end. The law passed a few days later.
Previously, Facebook had banned all users from sharing links to Australian news sources, Australian publications’ pages from hosting any of their own content, and Australian users from sharing any news links, Australian or international. Here’s what the platform looked like during the great news blackout:
Facebook also blocked anything it thought was an Australian news source — which included several sites that were 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 when it initially imposed the ban. “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 hated but Google is learning (and paying) to live with
The law, which passed on Thursday, 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, unless they make enough deals with those organizations outside of the law. If the platforms and the publishers can’t come to a payment agreement, they’ll go before an arbiter who will decide a fair price for them that they will have to pay, or else face significant penalties. The treasury minister decides which digital platforms are subject to the law.
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 past several months, both have threatened to take their services away from Australians if it were to pass.
Google blinked first, and began working out payment deals with Australian publications. A week ago, 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. Its stated reasoning was that if Australians can’t share news links, and Australian news organizations can’t post their own content, then 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 off Australian news publications before it really had to, which gave them, their government, and their readers a taste of what was to come if the media law went through. Facebook might have been hoping that a preview of its platform without Australian news would make lawmakers more amenable to passing a version of the law that Facebook preferred. Now that Australian lawmakers have, in fact, added a few amendments, it seems that gamble was correct. Facebook will still have to pay for the news one way or the other if it wants its platform to host links, but it has a little bit more control than it did before.
Facebook might be in the right here. It depends 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, he said, 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.
But others pointed out that the way Facebook went about standing on that principle may have done more harm than good; that suddenly depriving users of a service on which they’ve come to rely (including pages that have nothing to do with the news that also got caught in the ban) will only make them angry at Facebook, not Murdoch or the Australian government. And the rest of the world wouldn’t look kindly on Facebook for the move, either.
“Facebook managed to turn attention away from a flawed piece of legislation and on to its own reckless, opaque power,” wrote Emily Bell, director of the Tow Center for Digital Journalism at Columbia Journalism School. “Even for a company that specializes in public relations disasters, this was quite an achievement.”
Facebook said last week that it didn’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 deemphasized 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.
Like a boomerang, Facebook comes back around
The standoff came to an end less than a week after it started, with both sides claiming victory.
“After further discussions with the Australian government, we have come to an agreement that will allow us to support the publishers we choose to, including small and local publishers,” Facebook VP of global news partnerships Campbell Brown said in a statement to Recode. “We’re restoring news on Facebook in Australia in the coming days.”
The Australian government said it was introducing “further amendments” to the law, which appear to give Facebook more time to work out deals with news organizations and make investments in journalism, helping it avoid the mandatory arbitration it’s been so against. It’s very possible that the law won’t actually apply to anyone in the end, because Facebook and Google will be voluntarily paying enough news organizations to avoid it.
Facebook’s Brown also said that Facebook could very well re-ban the news in Australia if it doesn’t like how things are going: “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.”
In Australia, the question now becomes which news organizations will truly benefit from the law, or if most of that money is going to the major players with very little left for the small, non-Murdoch publications the law was supposed to help. If Google and Facebook are able to work out enough deals that the law no longer applies to them, smaller publications may still be left to accept whatever they’re offered. They may be the ultimate losers here.
Globally, this has shown that Google and Facebook will pay for news, but that they’ll do as much as possible for it to be on their own terms. Facebook was willing to cut off Australia’s news pages and links to bully an entire country out of passing a law it didn’t like. It may have won a few concessions here, but the rest of the world — including the United States, which is currently considering if Big Tech companies have too much power — may not have taken the lesson from this that Facebook wants them to. Countries may be more motivated than ever to check Facebook’s power before it gets much greater.