Unfriended: Australia’s Battle with Facebook

The titans of tech continue to battle Western-style democracies over-regulation and oversight. This time, the battlefield is set on Facebook’s Australian web presence. The fight stems from the Australian Competition and Consumer Commission’s recommendations to balance the scales of power between internet titans such as Google and Facebook and Australian news media. Specifically, the Morrison Government, led by Prime Minister Scott Morrison, stated through a December 2020 press release of the Treasurer of the Commonwealth of Australia, Josh Frydenberg, and the Minister for Communications, Cyber Safety and the Arts, Paul Fletcher, that it sought to introduce a law that would “ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia.” The release stated that “[d]igital platforms have fundamentally changed the way that media content is produced, distributed and consumed. This Code underscores the Morrison Government’s efforts to 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.” 

In short, the Australian Government set out to make sure that Facebook and Google reimbursed news media through Amendments to its already existing Competition and Consumer Act of 2010. These amendments, known as News Media and Digital Platforms Mandatory Bargaining Code, set out to “establish a mandatory code under which registered Australian news business corporations and designated digital platform corporations must comply with requirements including provision of information and non-differentiation and may bargain about the amount to be paid for making certain news content on designated platform services,” an informational release by the Parliament of Australia’s Parliamentary Library stated. Simply put,  the “code’s purpose is to address a clear and significant bargaining imbalance that exists between Google and Facebook on the one hand and the news media businesses.” 

For a bill to become law in Australia, it must go through the process described by the Parliamentary Education Office. First, there are three readings of the bill in the House of Representatives. Upon the third reading, members of the House of Representatives vote on the bill. On February 17, 2021, the House agreed to the third reading of the bill. The tech giants have taken different approaches to the impending bill as it moves to the Australian Senate. The Senate Standing Committees on Economics released a review that included analysis of both support and critiques of the bill. The study resulted in “the committee recommend[ing] that the bill be passed.” 

Support for the bill came from news media outlets, including but not limited to Rupert Murdoch’s news media empire News Corporation, while critics were led by Google and Facebook. Critics argued that social media companies would no longer be able to provide news services to Australians. As Google stated, “[w]e have to conclude, after looking at the legislation in detail: we do not see a way, with the financial and operational risks, that we could continue to offer a service to Australia.” Other critics of the bill worried that it would only be advantageous to already gigantic media conglomerates such as News Corporation. The Country Press Association declared that the legislation would “reward the large companies and their digital-only syndicated content models at the expense of smaller media businesses with true local news that is expensive to produce.” The Association warned that such a move would “lead to reduced diversity of media in Australia.”

As the bill continues to move through the process of becoming law, the two companies at the center of the battle have taken radically different approaches to deal with the Australian Government’s clear signals that payment for news is coming to their platforms. Google, on the one hand, has started reaching deals with Australian media outlets. The process is being spearheaded through Google News Showcase, a service launched on February 11th in Australia that Google describes in a tweet as “a new product which benefits both publishers and readers. Participating publishers increase their revenue through monthly payments from Google.” So far, media outlets in Australia such as Seven West Media and Guardian Australia have joined the News Showcase. 

On the other hand, Facebook decided to “restrict publishers and people in Australia from sharing or viewing Australian and international news content.” Facebook’s opposition to the proposed law for the payment of media outlets resulted in the site “unfriending” Australia, as The Guardian reported. Prime Minister Scott Morrison reacted to the move with a blistering statement posted to his Facebook page. the Prime Minister declared, “Facebook’s actions to unfriend Australia. . .cutting off essential information services on health and emergency services, were as arrogant as they were disappointing” Further, Prime Minister Morrison stated about big tech such as Google and Facebook, “[t]hey may be changing the world, but that doesn’t mean they run it.” Vowing to “not be intimidated by Big Tech,” the Prime Minister “encouge[d] Facebook to constructively work with the Australian Government, as Google recently demonstrated in good faith.” 

While Facebook and the Australian Government continue to battle over whether current policy sufficiently compensates news organizations, which Facebook contends it does stating that it generated “referrals to Australian publishers worth AU$407 million,” in 2020, Australia’s almost 26 million citizens are the ones who suffer as long as the news is unavailable on the platform. The legislation raises more significant questions about digital media, the use of paywalls, and the reimbursement for services by large companies through ad revenue or new laws such as the amendments to the Competition and Consumer Act of 2010. These questions continue to haunt all media outlets as traditional print media continues to decline, and independent media outlets struggle to remain profitable without the influence or money of large conglomerates such as News Corporation, Comcast, and AT&T. Importantly, this legislation serves as a test subject for how Western-style democracies may confront the issue of compensation of media outlets for their work being used and available on platforms such as Google and Facebook.

Christopher Becker
Contributor at The Commoner | Website | + posts

Christopher Becker is a civil litigator practicing in New York. Christopher graduated from the University of Alabama’s School of Law in 2016. There, he was a Senior Editor of the Civil Rights and Civil Liberties Law Review.

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