Facebook v Australia – the battle for control of the news

Category: News

For previous generations, the way to catch up with the news was reading the daily paper over breakfast.

These days, however, starting the day with a look through their Facebook feed has become more common for many, who also see it as an opportunity to keep in touch with acquaintances, follow hobbies, and watch their favourite news feeds.

It’s also become second nature to anyone using the internet to begin their daily journey at Google. “To google” has become as much a verb as a noun, and what started life in 1998 as a simple search engine has become an omnipresent part of everyday life.

Google now accounts for 91.68% of the Australian search engine market share, and 13 million of us are on Facebook, with nine million of us using it daily – I found those figures by googling them, of course!

It’s hard to imagine life without Google or Facebook, but recent events came close to threatening that position.

Because of a dispute between the Australian government and the two companies, Facebook closed its news pages for a short period, and Google came close to switching off its services altogether.

New media code has prompted anger

The cause of the dispute has been the “News Media Bargaining Code”.

The Competition and Consumer Commission have put this code together to regulate relations between news outlets and the likes of Google and Facebook. It’s also designed to help internal news outlets, bearing in mind that of every $100 spent on digital advertising in Australian media these days, $81 goes to Google and Facebook.

The new regulations require technology companies to pay news outlets for showing previews of their stories, and to tell them what data it collects on their users.

Both Google and Facebook have objected to the new code, arguing that they are helping news outlets by publicising their content.

Facebook took the nuclear option

After initially looking as though they were going to back down, Facebook blocked news content from Australian-based Facebook pages and also blocked anyone outside Australia from looking at Australian news feeds.

They said the law left it “facing a stark choice: attempt to comply with a law that ignores the realities of this relationship or stop allowing news content on our services in Australia”.

It was only at the eleventh hour, as the new bill was close to being formally approved, that they gave in and agreed to reinstate services.

Google finds a work around

At first, it looked as though Google would follow a similarly heavy-handed approach as the Australian market is worth nearly $5 billion annually to them. Even though that’s only a small percentage of their vast income, which saw them become only the third company to be valued at a trillion US dollars at the end of 2020, it’s still an eye-opening sum.

They claimed it would be difficult to separate news results from other search results, and even went as far as threatening to stop making Google search available in Australia if the government went ahead with the current version of the code.

However, they have ultimately backed away from such a confrontational approach and have come to deals with Australian media companies large and small for stories to appear in its “showcase” service.

This service, initially launched in Germany and Brazil last year, involves Google paying news outlets for their curated content, but on their own terms. They have already started signing deals with local news providers in Australia in a bid to prove the effectiveness of their new product.

‘We don’t respond to threats’

Prime Minister, Scott Morrison, was outspoken and unequivocal when he responded to Google’s original plans.

He said: “Australia makes our rules for things you can do in Australia. That’s done in our parliament. It’s done by our government, and that’s how things work here in Australia. People who want to work with that, in Australia, you’re very welcome. But we don’t respond to threats.”

Treasurer Josh Frydenberg subsequently lambasted Facebook, saying the social media giant’s actions were “unnecessary, and heavy-handed, and they will damage its reputation here in Australia”.

This unequivocal stance has drawn strong support.

Even though the loss of access to the Google search engine would have been a big blow to businesses, the Council of Small Business Organisations said the government should ignore the threats and press ahead with the code.

Additionally, Australian media companies, who have much at stake, disputed Google’s claims and called on the government to expedite legislation at the hearings held to discuss the code in January.

They also suggested that Google’s monopoly position was unhealthy, and that the threatened withdrawal of access to the search engine could help foster competition in that market.

In a smart move, which some are suggesting was the prompt for Google to back down, the Prime Minister made it public that he had been in talks with Microsoft regarding their search engine, Bing.

If Microsoft can create the technological mainframe to allow users to easily switch from Google to Bing, it creates a precedent that would reduce the impact of Google’s threats all over the world.

Where we stand now

For a time, we were caught in an escalating battle between our well-entrenched internet habits and our government.

The government has achieved its aim of getting Google and Facebook to pay the news companies. Google backed down early enough to avoid a massive confrontation, but Facebook’s decision to cut off access to news feeds, before subsequently agreeing to pay news providers, was seen by many as an extraordinarily heavy-handed move.

The government retains the ability to activate the letter of the law and force payment for news appearing in searches at any time in the future. This will ensure the voluntary deals are not eroded over time or denied to smaller and mid-sized publishers once the needs of larger media group are met.

Facebook took an enormous gamble. They were clearly betting that taking an aggressive hard line with a medium-sized nation such as Australia would send a tough message to larger markets around the world to back off on regulation.

The initial signs are that their heavy-handed approach – implementing the ban with no warning –caused a backlash amongst consumers. They certainly didn’t do themselves any favours in the PR war by closing pages run by health departments and charities in the middle of a pandemic.

There are also signs that other countries could follow Australia’s lead by adopting their own versions of the code. Canada has already signalled that it will be going ahead, and several European countries have suggested they are looking at similar measures.