RPT: ANALYSIS - Facebook Comes Out Swinging After Australia Passes News Content Law

MOSCOW (UrduPoint News / Sputnik - 02nd March, 2021) After months of deliberation, the Australian parliament passed legislation requiring Google and Facebook to pay for digital news content this past week, and while the search engine giant quickly concluded deals with publishers, Facebook temporarily banned access to news sites in a move that may strengthen its position in the long run, experts told Sputnik.

Lawmakers this past Thursday gave their approval to a set of final amendments covering the so-called News Media Bargaining Code, which was agreed by Treasurer Josh Frydenberg and the head of Facebook, Mark Zuckerberg, earlier in the week.

The agreed-upon amendments give Facebook more time to conclude deals with news outlets and signaled a temporary truce in a fierce row that saw the social media giant block access to news articles and the pages of state bodies, health departments, and emergency services.

Facebook's decision was met with severe backlash from Australian officials, including Prime Minister Scott Morrison, who slammed the company in a post on the social media site on February 18.

"We will not be intimidated by BigTech seeking to pressure our parliament," Morrison wrote.

The ban was eventually lifted late last week after the Australian parliament signed off on the amendments to the legislation.

Australia's attempts to check the power of Facebook and Google have also drawn the attention of several countries, such as the United States, United Kingdom, and Canada, which are mulling new antitrust laws to tackle the dominance of the world's internet giants.

AUSTRALIA STANDS UP TO TECH GIANTS

Australian Treasurer Josh Frydenberg said on Thursday that the new legislation would "help level the playing field & see Australian news media businesses paid for generating online content," but experts have questioned whether Australia's media moguls, such as News Corp. owner Rupert Murdoch, will gain even more power and wealth with the new measures.

"The Australian lawmakers must have surely been influenced by the world's greatest media mogul, the native Australian, Rupert Murdoch. Murdoch knows a thing or two about dealing with any threats or competition and did not want to see these Tech Giants become dominant in the news content marketplace," UK-based media expert Anthony Burr, of Burr Media, told Sputnik.

This sentiment was shared by Tim Hill, the co-founder and CEO of analytics firm Social Status, who slammed the Australian parliament's decision to pass the new legislation.

"The measure is 100% not justified. The original Digital Media Bargaining Code was an inside job between one of the Liberal Party's biggest donors & supporters, News Corp. Murdoch's ailing media companies wanted a way to muscle in on digital revenue because take up of their online subscriptions has been less than lukewarm," Hill told Sputnik.

The new legislation could lead to a "battle of the billionaires" between News Corp.'s Murdoch and Facebook's Zuckerberg, Andrew Selepak, a social media professor at the University of Florida, told Sputnik.

"The news in Australia is dominated by Rupert Murdoch who also owns media outlets and companies in the US and the UK. This proposed legislation does put the Australian government, and the people of Australia, against big tech, but it is also a battle of the billionaires between Murdoch and Mark Zuckerberg," Selepak said.

Frydenberg has said that Facebook and Google receive $81 of every $100 that is spent on digital advertising in Australia, and Vlad Davidiuk, a US-based public policy expert, told Sputnik that the new measures are an attempt to redress this imbalance.

"The proposed law comes in response to the new reality in which the giants of Big Tech increasingly take a disproportionately large share of online advertising revenue at the expense of media organizations. Original content created by media organizations gets free distribution on the social platforms, but the advertising revenue stays with Big Tech, making it difficult for media companies to offset costs of production," Davidiuk said.

FACEBOOK FIGHTS BACK AS GOOGLE CUTS DEALS

Google did not follow in the footsteps of Facebook and held back from pulling news content from its sites as the Australian government looked to pass the legislation.

Instead, Google finalized deals with several of Australia's media giants, including Rupert Murdoch's News Corp., and broadcasters Channel 7 and Channel Nine.

"Two very different products between Google and Facebook and two different things. Google caved in very quickly, agreed to pay the networks an amount that is, basically in Google terms, not a great deal of money for the networks who are really struggling in Australia ... But Facebook. No, they, they called their bluff on it," Peter Cox, an Australian media industry analyst, told Sputnik.

Cox added that all stakeholders are likely to interpret the new media legislation in different ways, meaning that further rows may take place in the coming years.

"And in the end I don't think that the two parties actually see the regulations that have been written from the same point of view. And I think that will cause confusion in the longer term. And then in the longer term, we'll come back to have these arguments again," the media expert said.

According to Anthony Burr, Facebook and Google's deals with national and embattled regional media outlets are likely to reshape the news landscape in Australia.

"Facebook's dealings with Australia have been ungainly, whereas Google has been better in negotiating licensing opportunities. It is for everyone's benefit that mistakes have been learned and the negotiations with other territories go well. These are the deals that can make or break the news media industry. Whether the money filters down to smaller regional news platforms, which are on their knees, I am not so sure about," Burr commented.

Facebook's decision to pull access to Australian news sites and state bodies may have demonstrated how integral the social media site is for business, and may strengthen its position in the long term, Cox added.

"For all the small businesses around Australia who have built themselves on Facebook, and I'm sure this is in every other country in the world that they exist, that they learned how valuable Facebook was to them, that they went for a whole week not being on Facebook and probably getting very little business as a result. So Facebook, yes, they called the bluff of the government and they've made themselves, I think, more valuable for the future," Cox remarked.

Anthony Burr said that Facebook's posturing was a "PR mistake" that drew "global criticism," although University of Florida professor Andrew Selepak asserted that the social media giant's response could be perceived as a warning sign to countries that are thinking of passing similar legislation.

"While Google has been working with Australian media and the Australian government to find a solution, Facebook has taken a hardline knowing if they relent, it will lead more governments to pass similar legislation. Facebook's tough stance is essentially a warning to any country that attempts to pass legislation that could hurt its bottom line," Selepak stated.

Timothy Berners-Lee, the inventor of the internet, has been critical of the Australian government's new legislation that forces social media giants to pay for news content.

"I am concerned that that code risks breaching a fundamental principle of the web by requiring payment for linking between certain content online," Berners-Lee told an Australian Senate committee meeting earlier in the year.

Australia could become one of many countries to pass legislation targeting the dominance of tech giants. The UK's competition watchdog has told firms that it is planning to launch a series of antitrust investigations, and in the United States, the House of Representatives' antitrust panel held a session this past Thursday to discuss potential measures to curb the power of internet firms.

According to public policy expert Vlad Davidiuk, the US Constitution's First Amendment would likely prevent Washington from implementing legislation similar to that passed in Australia.

"While media companies in Australia viewed the move as justified, other countries may begin looking into similar legislation. The First Amendment would offer the tech companies protection against similar measures in America," Davidiuk remarked.

Google is in the process of launching its new News Showcase product, with Facebook also planning a global rollout of its news tab feature in the coming months, and Anthony Burr said that these new tools would give consumers greater choice.

"In the end, the result is a win for consumers who will continue to have a choice of where to find engaging news content through credible global media platforms," the social media expert said.

The news landscape is also contending with the emergence of new platforms to share content, most notably Telegram and Signal. Downloads of the two mobile applications have surged since October, particularly as Facebook-owned WhatsApp looks to implement a controversial new privacy policy.

Peter Cox said that the row between Facebook and the Australian government may prompt news portals to look for alternative ways of gaining traffic for their content.

"I think that will make a lot of companies be more cautious or a lot of people will be more cautious that they may need some alternatives," Cox stated.

After the amended legislation was passed by Australian lawmakers this past week, Facebook lifted the ban on Australian news sites and pledged to begin negotiations with the country's news publishers.

Facebook, along with Google, has also committed to invest $1 billion in the news industry, signaling that social media networks will continue to have a crucial role in shaping the distribution of news content in the years to come.