Update: On February 23, 2021 Treasurer Josh Frydenberg and Facebook CEO Mark Zuckerberg struck a deal that would see Australian news return to the social media platform. The agreed-upon last-minute changes to the legislation included four amendments and would mark significant progress for both the tech giant and the Australian government. Uncertainties remain about how the law will work in practice and what the implications for smaller media outlets will be. We will keep you updated as the story unfolds!
Why is Google Funneling Millions Into News Outlets as Facebook Unfriends Australian Journalists? A new legislation, the Media Bargaining Code, forces two digital giants to pay publishers for their news stories. But they just won’t have it: Google threatened to cut off search for Australian users. Facebook is already a step ahead and removed all news articles from the social media platform. But not only that, pages for government agencies, nonprofits and political candidates went out the door with it (they are now reinstated despite Treasurer Josh Frydenberg claiming the damage has been done). How did it come this far and what will happen next?
The Cause: News Media and Digital Platforms Bargaining Code
The “News Media and Digital Platforms Bargaining Code” is a mandatory code of conduct that addresses a bargaining power imbalance between news media and digital platforms. It forces major digital platforms, namely Facebook and Google, to pay media companies for news content shared on their platforms. The bill was introduced into the House of Representatives in December 2020 and was passed on Wednesday, February 17 2021.
In a joint media release from the Treasurer and the Minister for Communications, the federal government claimed that their efforts would “ensure the Australian economy is able to take full advantage of the benefits of digital technology while protecting a strong and sustainable Australian news media.” Independent experts have, however, warned that the proposed legislation might just “break the internet” and outlined a range of problems with the proposed legislation. The government has since made some changes, but still fails to understand how Google and Facebook services work.Whilst the intent might have been pure, the government probably didn’t anticipate what the consequences of such a heavy-handed strategy would look like. Here’s what happened next.
Facebook’s Reaction: No, Thank You.
As of Thursday, February 18 2021, Facebook no longer allowed the sharing or posting of news on it’s platform. This includes both Australian and overseas publishers. Facebook justified the move with the claim that news publishers benefit from news sharing far more than Facebook does but also that their hand was forced, claiming they were left with a stark choice. According to a recent statement by William Easton, Managing Director of Facebook Australia & New Zealand, news makes up less than 4 percent of the content people see in their News Feed. For many publishers, however, Facebook plays a key role in driving traffic to their sites.
The Collateral Damage
The decision to block journalism in Australia couldn’t have been made lightly (at least we hope Zuckerberg had a few sleepless nights over it), its effects are wide and far spread. It’s not just staples like The Sydney Morning Herald, the ABC, The Australian and The Daily Telegraph that are missing. Smaller news outlets are equally affected and suffering tremendously, their pages now “unpublished” and stripped of content. Susannah George, founder of The Urban List, a lifestyle website that shares insights on things to do and where to eat out, fears the move could have fatal consequences for independent publishers: “Facebook’s decision [...] will have a significant and detrimental impact far beyond the media landscape, and our team is now hard at work to ensure we find new ways to fuel and support our cities’ businesses and culture.”
“Despite the best of intent, the news media bargaining code has squashed the upward momentum of digital-first publishing platforms and is a real blow to the diversity and vibrancy of the Australian media landscape.”
Susannah George, founder of The Urban List Australians scrolling through their Facebook feeds on Thursday morning, also found the pages for state health departments and emergency services wiped clean and the Bureau of Meteorology’s site left blank. Even pages for nonprofits, politicians and community groups were squashed. Whilst some of these have since been restored, it is unclear what the future holds.
Google’s Reaction: Support Journalism? Well, if we must.
In January, Google had threatened to cut Aussies off Search services. Melanie Silva, managing director and vice-president of Google Australia and New Zealand, seemed unwilling to compromise. If the government’s proposed media bargaining code became law, it would not only splinter the internet but completely change the face of journalism. During what some referred to as a “test run” or “experiment”, selected Australian news sites had already been buried in Google search results.Google has since backed down from its own threat, leaving Facebook in a lonely position.
Over the first weeks of February, Google has been signing deals with the biggest publishers in Australia, including Seven West Media, Nine Entertainment and Rupert Murdoch’s News Corp. And we can expect more contracts to be signed over the next days and weeks. It is unknown how much Google paid, but it’s likely that these deals are worth tens of millions of dollars a year. This move could buy Google some time, possibly even keep its name off the News Media Bargaining Code or at least avoid the more stringent parts of the new law. The regulatory framework would still affect Facebook and other companies might be added. And it is more likely the beginning of even greater change: The government report that included recommendations for a holistic, dynamic reform of the digital space and led to the new legislation, also reflected on changes to privacy and consumer protection laws.
I have seen some commentators imply that Australians will be better off getting their news elsewhere than Facebook.
But banning links to news articles sounds like a recipe for misinformation and conspiracies flourishing with impunity on the platform, no? https://t.co/Jd9Or2tJ4Q— Will Oremus (@WillOremus) February 17, 2021
A Test Lab For Facebook And Google
Australia seems to have become a test lab for what happens to Facebook, Google and news publishers, when governments make the rules. Google’s rush to pay, may indicate that even a country with a relatively small population can sharply alter how tech giants operate and make their money. Whilst news queries make up only 1.25 percent of all Google searches, Silva expressed her concern about the proposed Australian code and it setting an international precedent.
Truth be told, the news outage might be short-lived. Australia’s treasurer Josh Frydenberg, a leading figure in the negotiations with Google and Facebook, said he is in contact with Mark Zuckerberg and that negotiations will continue.
This morning, I had a constructive discussion with Mark Zuckerberg from #Facebook.
He raised a few remaining issues with the Government’s news media bargaining code and we agreed to continue our conversation to try to find a pathway forward.— Josh Frydenberg (@JoshFrydenberg) February 17, 2021
For the latest industry insights and trends that will change the face of marketing and design, keep exploring the Anchor Digital blog.
We embrace new technologies and strategies to help you keep pace and stay ahead of the competition. If you have any questions or concerns, don’t hesitate to get in touch with us! We’re looking forward to hearing from you.
