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Australia Wants Facebook and Google to Pay for News Published on Their Platforms

Who remembers what life was like before we got the news directly from our Facebook feeds or Google search results? Well, Australians may soon have to start jogging their memories. Tech titans Facebook and Google are coming to terms with a new law passed by the Australian government that forces tech companies to give subsidies to news publishers. 💰

The negotiations for the law’s terms reached a fever pitch in February when Facebook suddenly pulled news content out of Australian feeds. The blockade was eventually reversed, but it perfectly illustrated how much power Facebook has over digital content. Here’s everything we know about Australia’s controversial media code.  

What’s Going On Down Under with Facebook and Google?

To put it bluntly: the Australian government wants tech companies to pay for news shared on their platforms. It passed a new law called News Media and Digital Platforms Mandatory Bargaining that forces companies like Facebook and Google to pay publishers for news content. Under the law, Facebook and Google are required to negotiate licensing agreements with publishers for the news articles that appear on their respective platforms. 

“This legislation will help level the playing field and see Australian news media businesses paid for generating original content,” said Australian Treasurer Josh Frydenberg, a key figure in the negotiations. 

Google and Facebook fought hard for years to prevent the law from passing, but they ultimately failed. They now have two options: give money to news publishers or completely remove news content from their platforms in Australia. 

Google took the high road and announced a three-year global agreement with Rupert Murdoch’s News Corp to pay for news content. That was one of several such deals it announced recently, indicating it has folded to Australian publishers’ demands. 

Facebook took the opposite route and announced it was no longer sharing news on its platform in Australia. The abrupt change left a lot of people to wonder what the heck was going on. 😦

Facebook Blocks News in Australia for Five Days

Facebook blocked news in Australian feeds on February 17. It was a pretty big deal because an estimated 39% of Australians get their news content from Facebook. That roughly matches the 42% global average, according to a 2020 report

“At the heart of it, in Facebook’s view, is a fundamental misunderstanding of the relationship between Facebook and news publishers,” said Nick Clegg, VP of Global Affairs at Facebook, in a blog post. “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.”  

Clegg denied the assertion that Facebook steals original journalism for profit, noting that fewer than one post in every 25 on the Facebook feed contains a link to a news story. 📰 He went on to say that news publishers actually benefit from publishing on the social network. According to him, the platform generated approximately 5.1 billion referrals to Australian publishers in 2020 alone. Those referrals have an estimated value of  AU$407 million to the news industry.

“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?” he wrote.

He compared the situation to “forcing car makers to fund radio stations because people might listen to them in the car—and letting the stations set the price.” 📻 He said Facebook is happy to partner with news publishers. The platform has reportedly already announced partnerships with publishers to pay for content in its Facebook News product in the UK. The list of publishers includes The Guardian, Financial Times, Telegraph Media Group, Daily Mail Group, Sky News, and more.

Clegg concluded by noting there are legitimate concerns about the disruption the internet has caused to the news industry. However, those issues need to be solved based on “the facts of how value is derived from news online, not an upside-down portrayal of how news and information flows on the internet.” He suggested the internet needs new rules that benefit everyone, not protect the interests of a few.  

The dramatic ban on news content on Facebook only lasted for five days before the Australian government offered the platform concessions. It loosened three requirements of the media law: 

  • Officials must consider whether a company has contributed to the sustainability of the Australian news industry
  • Digital platforms must be given a 30-day notice to negotiate before the law takes effect
  • The media code only applies to digital platforms that intentionally publish news content

What Happens Next?

Under the new media law, Facebook and Google will have 90 days to strike terms with publishers. If they are unable to do so, an arbitrator will issue a binding decision. Thanks to the concessions it got, Facebook could avoid much of the law’s provisions if it plays its cards right and signs agreements with enough publishers.  

The Australian law may inspire similar laws. Canadian Prime Minister Justin Trudeau has said he intends to “ensure the revenues of web giants are shared more fairly with creators and media.” Lawmakers in the EU and UK have cited Australia as inspiration for possible future legislation. France already implemented an EU copyright law with aims similar to the Australian code.

How Facebook, Google, and other digital platforms navigate this new media environment remains to be seen. But if corporations as large and powerful 💪 as Facebook and Google comply, then other tech companies will likely follow suit. This could change news consumptions as we know it (and not just in Australia).