Oceania | Society | Oceania

Unfriending Australia: Facebook’s Nuclear Option

How the current standoff between Facebook and the Australian government came about.

Unfriending Australia: Facebook’s Nuclear Option
Credit: Pixabay

On February 17, Facebook announced it would restrict publishers and people in Australia from sharing or viewing Australian and international news content on Facebook feeds. An unintended consequence of the decision was Facebook’s removal of non-news pages, such as those operated by the Bureau of Meteorology and emergency services. To demonstrate how Facebook lost control of its own algorithm, Facebook’s own Facebook page was blocked. In light of the incident, Facebook apologized for the mistake and reinstated access to government, charities, and NGOs, but not without the Australian Treasurer Josh Frydenberg commenting that the move was “unnecessary, heavy-handed and will damage Facebook’s reputation.

That appears to be exactly what happened. Facebook’s ban was compared to a North Korean dictatorship; its shares dropped in the wake of the ban; and it seemingly united Australia’s political parties against the social media giant. Since then, Facebook continues to engage in a series of failed negotiations with the Australian government to reinstate news content across the country. However, in an escalation of the feud, the Australian government announced that it was pulling all of its advertising campaigns from Facebook.

With the Australian government and Facebook apparently locked in a battle of nerves, the recent episodes continue to raise fundamental questions about the information environment, the role of big tech, and the power it continues to yield.

The initial impetus behind the ban stemmed from the Australian government’s News Media Bargaining Code. The code stipulated that large technology platforms that operate in Australia, notably Google and Facebook, should have to pay local news publishers for the news content made available or linked on their platforms. The code seeks to respond to the shift of advertising revenue away from traditional news media platforms toward the tech giants.

An Australian Competition and Consumer Commission report indicated that of every A$100 spent on digital advertising in Australian media, a combined A$81 is directed toward Google and Facebook. The purpose of the new regulation, therefore, is to create a bargaining code to divert digital advertising revenue generated from the tech giants and funnel that back to the traditional news landscape, essentially leveling the playing field.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

In the wake of the code, Google, after threatening to remove its search engine from the Australian market, ultimately abandoned its position in favor of complying with the code by striking agreements with different Australian media stakeholders to provide financial compensation for the publication of news content. Facebook on the other hand, adopted a nuclear option – banning all news content on its Australian platform, as it had threatened to do. As a result, Facebook escaped the code that would force them to follow Google in negotiating payments to Australian media companies.

The current standoff is part of a larger debate on the dynamics of the news media environment. On the one hand, Australians, like many others, were granted unfettered access to news and information through online platform. On the other hand, the information market underwent a still-ongoing shift from traditional platforms toward the digital giants. This shift has caused major disruptions for an already struggling traditional media landscape. The Australian strategy is acknowledged as one of the most aggressive counters being proposed globally.

The underlying current of the proposed legislation isn’t meant to redirect advertising revenue away from big tech per se, but to address the increasing market power that Facebook and Google possess. As such, the Australian government has attempted to regulate the market to bring about a fairer outcome.

The big tech companies aren’t inherently opposed to this idea. Indeed during a U.S. Senate inquiry, Facebook CEO Mark Zuckerberg suggested that the internet does need new governing rules and reiterated Facebook’s aspiration to collaborate with governments in making this a reality.

However, when faced with the proposed Australian legislation, Facebook claims the law is unworkable and fundamentally misunderstands the relationship between the platform and those who use it to share news content. Facebook suggests that search engines like Google are inherently intertwined with news companies and media publishers. Media providers do not voluntarily provide their content for publication on Google’s search engine; it has just become second nature for individuals to conduct a Google search and find news content. Facebook, however, argues that it remains, above all else, a social media platform, not a search engine. Therefore, Facebook users voluntarily choose to post news on Facebook. Therefore in the viewing of news content, Facebook simply acts as a middleman; it’s the news media companies that voluntarily post on Facebook’s platform and redirects users to the official website.

Additionally, the code does not address the underlying issue of market power. The code allows news organizations to negotiate with digital platforms about things such as how their algorithms work to prioritize content and money. This does not reduce the market power of big tech, nor will it increase competition.

Another problem is that, under the code, smaller independent news media companies are not eligible to bargain with the tech giants because of their limited market cap. Also, given Facebook’s wide audience in Australia, it has become the platform of choice to gain traffic for smaller news companies, a benefit that the code disrupts.

The Australian government is attempting to tackle one of the most important issues of our time: the role of big tech. However, although maintaining the best of intentions, the code will not deliver what the government is intending. The protection of public interest journalism is not helped by blocking a major avenue through which Australians attain their news content, nor does it assist in increasing competition by limiting the scope of those who can negotiate compensation.

Conor McLaughlin is the research coordinator at the Defence Research and Engagement portfolio at Edith Cowan University (ECU) in Perth, Western Australia.