What’s going on between Australia, Australian news and Facebook? Explained.
On Wednesday, Facebook took unprecedented steps and banned all mainstream media outlets in Australia from its platform, as well as stopped all news from appearing in the newsfeeds of people in Australia. So, what’s going on?
News companies claim they add value to Facebook…
How often do you see a news article on Facebook? How often are you first alerted to a breaking news story after you see it appear in your newsfeed? How often do you read a headline on Facebook but don’t click the link for the full story? How often do you see an advert appear on Facebook that is related to a news, magazine or lifestyle article that you read recently?
For most, the answer to most if not all of those questions is often. Facebook not only provides a platform that allows us to connect with friends and family, but we can also see what’s going on in the world at the same time, at the same place. The questions above demonstrate a simple reality; the news helps Facebook turn a profit. The news adds value to social media platforms.
But it’s a value that news organisations are saying that sites like Facebook are not compensating them for, despite Facebook profiting from it, directly or indirectly.
Yet ‘big tech’ sites like Facebook are dwarfing news sites in ad revenue…
Big tech companies like Facebook and Google receive the lion share of advertising revenue (that’s the money that third party companies spend to place their adverts on sites like Facebook or even this site.) For every $100 spent on advertising, $53 goes to Google, $28 to Facebook, and a mere $19 is split between every other publisher on the Internet.
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And that imbalance is only getting bigger. This means more companies are spending more money to advertise on big tech sites like Facebook and Google. And less are spending money to advertise on the websites that bring you the news (as well as every other website on the Internet.)
And while Facebook is doing extremely well from a financial standpoint, news companies are not, with many struggling to stay afloat.
News companies say this isn’t fair and deserve compensation from Facebook
They say that they should be compensated by Facebook, who they claim is profiting from the added value that their work, their stories, their analysis provide. Without the news, Facebook would be of less value, and this would inevitably affect Facebook’s bottom line.
And politicians in Australia agree.
In fact politicians in many countries agree, but Australia is the first country to introduce legislation that will effectively force Facebook to pay news companies in the country to have their content on their site.
For the last year or so, legislation has been in the works in Australia that would force big tech companies to negotiate a price with news organisations for news stories to appear on their platforms. And if a negotiation cannot be made, it would be up to the Australian Communications and Media Authority to set a price.
So if the legislation passes (it has currently passed the lower house of Parliament) then Facebook will, like it or not, have to pay up if it wants Australian news articles to appear on their platform.
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Facebook, inevitably, disagrees.
And to demonstrate their point, they’ve banned Australian media from their platform, as well as prevented anyone in Australia from seeing or sharing any local or global news website.
Facebook’s argument is that the legislation is deeply flawed, and doesn’t reflect the relationship between their platform and news websites. They also claim it ignores the tools that Facebook provide to help news organisations reach a wider audience.
Facebook also claims that it should not have to pay for content that it didn’t force companies to hand over, content that Facebook hasn’t taken without consent, or content that Facebook didn’t even ask for.
Facebook’s managing director for Australia and New Zealand, William Easton, said in a blog post –
The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content. It has left us 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. With a heavy heart, we are choosing the latter.
…
We’ve long worked toward rules that would encourage innovation and collaboration between digital platforms and news organisations. Unfortunately this legislation does not do that. Instead it seeks to penalise Facebook for content it didn’t take or ask for.
While Facebook has struck deals with news companies elsewhere to pay for their content, including in the UK, it appears the social networking platform is taking a stand against countries that take steps to force Facebook’s hand. Or rather, force money out of their wallet.
In this case, taking a stand has meant banning all Australian news outlets from posting on their platform, and banning all Facebook users from sharing links to Australian mainstream media, as well banning Australians from seeing any news websites.
The move has already received considerable backlash. Only hours after the ban, #DeleteFacebook was already trending on Twitter.
And a stand-off begins…
How long the stand-off between Facebook and the Australian government will continue is not known, but the Australian PM Scott Morrison has said they will not be intimidated by the tech giant.
Google also found itself in a similar predicament, though the search engine giant relented, at least in part, and struck a deal with Australia’s News Corp that would see Google pay a subscription for news stories from sites in the News Corp media empire.
The case is being watched worldwide, and many governments from other countries are likely to at least consider similar legislation, which is something Facebook obviously wants to avoid.
In Australia, the proposed legislation has passed the lower house and will proceed towards the Senate in due course, but it has broad political support and it expected to pass. Whether this will mean Facebook avoids paying up by permanently banning Australian media or whether they relent will remain to be seen.