Industry News Regulations

Wrong answers only: Google vs. Australia vs. Facebook

A giant experiment with potentially devastating fallout

Facebook’s decision to block users from posting news links and removing publishers’ ability to post content on the platform will go down in history books as a very controversial decision.

Some see it as a giant experiment of our age (sure, why not use almost a whole continent as guinea pigs). Others hate it. Even those praising it are quick to add the dangers it might bring about.

The move by the social media giant is much more impactful than the shutting down of Google News in Spain. That turned out to almost not affect news publishers in the long term, although studies showed mostly smaller publishers suffered most.

Facebook did not play ball, Google probably did not have a choice

Just to reiterate quickly what happened, here is the state of things as described by Vox: 

“Australia is on the cusp of passing a law called the News Media and Digital Platforms Mandatory Bargaining Code, which would force Facebook and Google to pay publishers if they host their content. The law is a response to years-long complaints from news outlets around the world about the role that Google and Facebook — and their mammoth digital ad businesses — have played in the decline of journalism and the decimation of its business model in the internet age. The two companies have responded in different ways: Google is making deals with Australian news publishers; Facebook is cutting them off entirely.”

Facebook’s decision probably surprised many. It’s loud, radical, and creates a lot of headlines. Most are not positive for Mark Zuckeberg’s company. You have to ask yourself how much worse the alternative had to be to choose this option.

The Bargaining Code is probably even worse than you read in most of the reporting (read this analysis from Ben Thompson to see just how bad the proposal is). But if Facebook agreed to the terms it would create a precedent for other countries. 

Google had almost no choice. The news in the search results page is much more tied to the relevance (also success and overall usefulness) of the service than news posts are to News Feed.

In some ways Facebook’s decision was obvious, too. The impact might still come back to haunt Zuckerberg down the road. But after such a major and uncomfortable move, I am sure many regulators around the globe took notice. We all eagerly await the results of said experiment.

In many ways Facebook has the most to lose here. If it turns out Australians in general will end up consuming less news and be less informed, then Zuckerberg just handed a smoking gun for future antitrust cases.

Wrong answers only

I am sure you are familiar with the popular meme “wrong answers only.” It’s a kind of go to move for social media managers if there is not a lot of content out there. It’s a plan B. Still, I haven’t seen it fail to entertain. But there is a reason it is called “wrong answers.”

In the case of the new Australian media law we are seeing this meme play out in real life, just think about it and tell me if I am wrong:

  • Google will end up having to cut deals with big publishers
  • Big publishers will learn political blackmail pays
  • Facebook is going to block people from posting news
  • Politicians around the world looking at Australia will think this is a great idea
  • Australians will be part of an unwanted social experiment
  • (I could go on)

Does it seem right to you? Sure, each party is choosing the best possible option for them; Publishers have been angry at the duopoly for many years and here is a chance to get back lost ad revenue (their words, not mine); Facebook’s block is the least bad option for the company; Google had to cut deals, Microsoft was already eyeing a new market for Bing; the government wants to show power and tech giants have been a sore thorn for long.

Unfortunately, the whole debate was stripped of the topic of how to make journalism better, how to help news deserts or local journalism.

I like what Casey Newton wrote and can agree with that:

“I wish Australia would take Facebook’s rejection as a sign it should rethink its approach to media regulation entirely. It could just tax companies based on their revenues, for example. It could earmark those revenues to support journalism — nonprofit public media, even, which has consistently been shown to have powerful civic benefits. Or it could pursue a bargaining code that requires big media conglomerates to create and support jobs in journalism, rather than simply accept tens of millions of dollars and spend them however they like — or just return it to shareholders.”

Also, I haven’t mentioned how the proposal would impact small news outlets or news startups. The answer is likely: not well. The law is written in a way that favors incumbents. It cuts off small news organisations with smaller revenue, and even leaves loopholes for media outlets, some of  which do not do hard news, to apply for the link tax from Google.

One part of me cannot wait to see how this experiment unfolds. There were already predictions misinformation will thrive on Australian Facebook as people cannot link to actual news. Publishers will take a traffic hit which might send some people to visit the news sites directly (as Spanish publishers saw after Google News was shattered in the country).

Another part of me is very sceptical about the state of debate of Big Tech vs. the news industry. Especially when reading that politicians across the globe are considering similar moves.

Photo by Photoholgic on Unsplash

Hi! I'm David Tvrdon, a tech & media journalist and podcaster with a marketing background (and degree). Every week I send out the FWIW by David Tvrdon newsletter on tech, media, audio and journalism.

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