As Facebook works to reinstate news Pages in Australia, the company’s VP of Global Affairs Nick Clegg has today provided some additional context on its decision to pull news from the nation due to disagreement over the Australian Government’s proposed Media Bargaining Code, which would essentially have forced Facebook to pay for hosting links to news sites.
Facebook’s stance has been widely misinterpreted – willfully and not – around the world, with the action serving as both a reminder of Facebook’s power, and a prelude of what could be coming to other nations that are also looking to implement similar revenue-sharing agreements. At its core, there is merit to what the proposal seeks to address – clearly, there are conflicts that stem from the dominance of the tech titans, Facebook and Google, for example, account for around 80% of online advertising revenue in Australia.
The two companies, along with Apple and Amazon, do have significant power and influence over their respective markets. But as Clegg explains, the Australian proposal, as it was laid out, is not the way forward on this front.
“The assertions – repeated widely in recent days – that Facebook steals or takes original journalism for its own benefit always were and remain false. We neither take nor ask for the content for which we were being asked to pay a potentially exorbitant price. In fact, news links are a small part of the experience most users have on Facebook. Fewer than one post in every 25 in your News Feed will contain a link to a news story, and many users say they would like to see even less news and political content.”
Clegg’s last point refers to Facebook’s more recent push to reduce political content in News Feeds due to user concerns about it becoming too much, and making Facebook a less welcoming place to interact.
In his thousand-word rebuttal, Clegg lays out the basic premise of Australia’s Media Bargaining Code, and Facebook’s issues with it. As noted, the aim of the Code, which has been in development for several years, is to tackle the imbalance in the digital advertising market, which, as controllers of the platforms themselves, Facebook and Google are able to tip in their favor, giving them significant advantages over other media players.
The power this has afforded the two is a concern, but as Clegg explains, seeking to address this by taxing links is not a workable or equitable solution in the long-term.
“It’s the publishers themselves who choose to share their stories on social media, or make them available to be shared by others, because they get value from doing so. That’s why they have buttons on their sites encouraging readers to share them. And if you click a link that’s shared on Facebook, you are directed off the platform to the publisher’s website.”
Indeed, Clegg notes that, in his view, the motivation for this Code stems not from a push to level the playing field, but due to pressure exerted by the big media players.
“Of course, the internet has been disruptive for the news industry. Some have made this transition to the online world successfully, while others have struggled to adapt. It is understandable that some media conglomerates see Facebook as a potential source of money to make up for their losses, but does that mean they should be able to demand a blank check? That’s what the Australian law, as it was proposed, would have done. Facebook would have been forced to pay potentially unlimited amounts of money to multi-national media conglomerates under an arbitration system that deliberately misdescribes the relationship between publishers and Facebook – without even so much as a guarantee that it is used to pay for journalism, let alone support smaller publishers.”
This is true – even now, it’s unclear how much Facebook will be required to pay, with the latest amendments to the Code providing exemptions for digital media platforms that have “made a significant contribution to the sustainability of the Australian news industry” via individual commercial agreements. That lack of clarity and specificity within the Code is also what lead to Facebook removing a wide range of Pages, news and not, as part of its response, causing much angst among community groups and small news organizations.
Facebook is now working to reinstate all Pages, but given the tension between the two sides, and the lack of a definitive way forward, there’s no guarantee that Facebook won’t remove them again in future, if a deal can’t be met.
Certainly, going on Clegg’s wording, the dispute has not been settled, as such:
“The events in Australia show the danger of camouflaging a bid for cash subsidies behind distortions about how the internet works.”
Clegg does note that Facebook has invested $600 million to support the news industry since 2018, and that it’s planning to invest $1 billion more over the next three years.
“Last month, Facebook announced deals with The Guardian, Telegraph Media Group, Financial Times, Daily Mail Group, Sky News and many more, including local, regional and lifestyle publishers, to pay for content in its Facebook News product in the UK – a new tab where you can find headlines and stories next to news personalized to your interests. Similar deals have been reached with publishers in the US, and Facebook is in active negotiations with others in Germany and France.”
This is the likely final outcome in Australia – Facebook News will eventually be rolled out, based on new agreements with local publishers. Google has struck similar deals for its News Showcase product, with both platforms essentially providing a means for Facebook and Google to help support local publications without having to sign-up to any link-sharing toll, of sorts.
That enables both to glean direct benefit from news content, and to help showcase reputable, credible news sources in their apps. There are conflicts there too, in that Google and Facebook get to decide which publications are allowed into their news offerings, but the end result could see a reduction in the distribution of misinformation and partisan reportage, and an improvement in online discourse as a result, while also providing an additional funding stream for more publishers, not just the big players.
Which is essentially Clegg’s key point:
“The internet needs new rules that work for everyone, not just for big media corporations.”
Definitely, Facebook has taken a reputational hit as a result of its actions in Australia, with people in the nation seeing its actions as a failure to support the local industry (when Google came to the party). While outside Australia, the move has raised more questions about Facebook’s market power, which will only fuel antitrust concerns.
How those impacts ripple out over time will be interesting to watch – but right now, it seems like this could have been a momentary blip within the broader push to establish greater balance in the sector.