In a world-first law, proposed by Australia aimed to force tech giant such as Facebook and Google to pay for news content. The aim of which was to address the media’s loss of advertising revenue to tech giant such as Facebook and Google. This has followed long concerns about the market dominance of such firms. In a sudden retaliation, Facebook recently banned Australian media organizations from sharing news content on the platform. The escalating dispute is expected to worsen, and many outlets have described the argument as ‘one that the world is watching’ – but how did it start and how has it escalated already?
The monopoly that tech firms hold on Australia’s news networks has long been under scrutiny, in 2018 an Australian government regulator examined the impact Google and Facebook had on competition in media and advertising, finding an imbalance between tech firms and the media. The BBC reported: ‘Google is the dominant search engine in Australia and has been described by the government as a near-essential utility, with little market competition. And social media is a key source of news. According to the Reuters Institute Digital News Report 2020, 52% of Australians questioned in a survey used social media as a source of news. Facebook ranked top as a social media news source, followed by YouTube and Facebook Messenger.’ From this inquiry it was recommended that a code of conduct was put into place and for which, a draft law was revealed in July last year.
The draft asked that companies would pay for news content and enable news companies to negotiate with tech firms for the content that appears in news feeds and search results. It would initially focus on Google and Facebook but may expand to other tech companies. The code could be mediated by the Australian Communications and Media Authority and penalties could be issued.
The BBC reported: ‘The government has argued that tech giants should pay newsrooms a “fair” amount for their journalism. In addition, it has argued that the financial support is needed for Australia’s embattled news industry because a strong media is vital to democracy. Media companies, including News Corp Australia, a unit of Rupert Murdoch’s media empire, have lobbied hard for the government to force tech firms to the negotiating table amid a long-term decline in advertising revenue.’
However the argument in response from Facebook’s manager for Australia and New Zealand, William Easton, was that the “the value exchange between Facebook and publishers runs in favour of the publishers… Publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue”
After long-standing threats from Google and Facebook that they would withdraw their services from Australia, Facebook blocked Australian users from sharing and viewing news. Users can no longer post links and all posts have been removed from the pages of Australian and international media organizations. For Australia, this comes as the rollout of their coronavirus vaccine program begins. Speaking to New Scientist, Belinda Barnet at the Swinburne University of Technology in Melbourne said: ‘“This is going to make misinformation on the platform significantly worse… They are removing the main source of timely, current and accurate information from their platform… It makes a mockery of their public commitment to fighting misinformation, in the middle of a pandemic.”
According to New Scientist, ‘the ban initially removed many non-news pages too, including Australian health authorities, emergency services and the national weather bureau. Charity organizations, including a childhood cancer research institute and a domestic violence helpline, were seemingly also affected.’ This however, was admitted as a mistake by a Facebook spokesperson and will apparently be reversed.
Google on the other hand, has made deals with several Australian media companies and will pay for content from news sites. This includes News Corp, in which a three year agreement would see a collaboration on subscriptions, share advertising revenue and invest in video journalism on YouTube. Other companies include a $30m annual payment to Nine Entertainment.
The world watches on and many believe Australia’s stand against these tech firms could set a global precedent in order to balance out the power that these tech giants have over media companies in different countries. It could change the way that news content is viewed online for many places. In contrast to Facebook’s resistance, Microsoft has supported the proposed law, stating: “The code reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses.”