Australia's fight with Facebook and Google

By WILL ALLEN

Overnight Facebook destroyed digital news in Australia. On the day that saw the technology giant Google begin to negotiate deals with news publishers hosted on Google Search, Facebook took the step to effectively unfriend news publishers when it decided to remove all news content on its Australian site. This fundamental fight over the news can be traced back to a pathbreaking piece of legislation aimed at forcing these two digital platforms to alter the way they pay news publishers for their content.


Australia has for the last year been proposing the new legislation titled ‘News Media and Digital Platforms Mandatory Bargaining Code.’ The Australian Competition and Consumer Commission has crafted a bill that aims to dramatically alter the relationship between the news, Facebook and Google. Its bill centres around how the two sides negotiate revenue digital platforms afford the news publishers. The code states this in its title, focusing on the ‘Digital Platforms Mandatory Bargaining.’ The bill would mandate that both Facebook and Google have to negotiate with media publishers and pay them for content [bargaining can either be done separately or through group mechanism.] Its aim is to weaken the negotiating power Google and Facebook have to crush a news publisher's bargaining power. Significantly, the bill would require the two sides to come to a mutual agreement for ad revenue sharing. Vitally, if this cannot be achieved then Facebook and Google get thrown before an independent arbiter who will decide what a fair settlement is. By doing this the playing field is levelled to make negotiating a fairer process for publishers who can force the tech giants to pay up or face losing more money against the independent arbiter.


Regulation comes after decades of decline and an uncertain future for media publishers. Traditionally printed media would generate its own independent revenue when advertisers placed their adverts in the pages of a newspaper. However, over recent years print media has plummeted in popularity and so has the revenue generated. At the same time Google and Facebook have gained ever increasing control over the different streams of advertising revenue they use to profit from in a digital world.


Last year Google officially became the first major company under current antitrust investigation in the US to be charged. Accused of none other than monopoly-like behaviour to protect its ad business from competition. Since then the US government has brought an anticompetitive case against Facebook claiming it also illegally crushed competition. Now, Australia with its new proposed bill is again challenging the monopoly power these extremely large companies have in the news publishing business.


The two tech giants initially attempted to strong-arm the government to kill the bill by stating they would have to consider parts of their businesses remaining available to Australians. Google announced it would pull its search engine out of the region and, in a similar tactic, Facebook would remove and restrict all news content from its Australian site. In plain view of regulators, these companies have used their considerable power to attempt to suppress regulation they oppose. However, they claim the law misinterprets the relationship Google Search and Facebook have with news publications and tries to unfairly flip the relationship on its head at the expense of these two companies.


Both companies remained committed to carry these actions through as a potential vote by parliament neared. This week as the vote neared Google blinked first. It softened in its opposition and announced it had negotiated a large three-year deal with the publisher News Corps. and was working on more. With these actions Google has begun to accept further regulation aimed at loosening its stranglehold over digital ad revenue in Australia. Signalling it wants to want to get ahead of regulation with early deals to avoid the shame of being forced before an arbiter.


That left Facebook as the only company standing against the legislation. After Google announced it had begun negotiating with publishers, Facebook fulfilled its threat to take the news offline. Facebook has now pulled every regional and international news publication from its Australian site. Seeming to go further in its strong-arming of the government, Facebook also took down government agency sites such as mental health and domestic violence support pages [it later ‘blamed the government’s definition of news content’]. In doing so it has revealed the extremely petty and concerning lengths Mark Zuckerberg’s company is willing to go, to avoid regulation of any kind.


This move follows Facebook’s long quest to go unregulated on the internet. Leaked recordings show this bully-boy action by Facebook is set to be a regular feature in regulatory fights. In 2019, Zuckerberg was recorded saying his company will ‘go to the mat’ if the then presidential hopeful Elizabeth Warren sought to break up Facebook. With its current action against the proposed Australian bill the company has demonstrated it is not just a hypothetical situation, it will fight.


Ironically, Google and especially Facebook seem to be exercising the very monopoly power they say they don’t have, let alone use. Facebook’s fight leaves the bill more likely than ever to pass into law. The future looks certain to involve more regulation of big tech and only time will tell what Facebook is willing to do after removing all news content from its Australian site.


Photo by Solen Feyissa on Unsplash