A Triumphant Ultimatum? – Facebook Responds To Australia’s News Media Bargaining Code
On the 9th December 2020, the News Media Bargaining Code made its debut in the Australian Parliament. The proposed provisions culminated in a monumental dispute over online rules. Nonetheless, the state perseveres its implementation preparations. A statutory structure is set to redefine the value of content, formulating a novel apportionment of profit derived from promoting news.
The Bill transcribes a code drafted by the Australian Competition and Consumer Commission, addressing imbalances in bargaining powers between news media businesses and online platforms. Its rationale is targeting market dominance - an environment in which 81% of advertising profits are circulated back to Google or Facebook. The code spells out a strict arbitration structure to strike deals and shift the generated return towards the publishers.
Google initially denounced the proposed code. It fought back with #AFairCode campaign, asserting that key principles governing a free web would be undermined under the new rules. Scott Morrison, Australia’s Prime Minister, refused to capitulate on the regime. Consequently, Google’s threats to pull operations out of Australia failed to materialize. The company commenced concluding deals, including a compromise with News Corp.
Facebook’s Initial Response
Facebook portrays a contrasting image, refusing to adhere to the draft law. In retaliation, the company refused to pay the additional sums and blocked Australian users from viewing or sharing news publications. The ban extended to critical profiles, including charities and governmental agencies. Facebook pointed to the wide definition of ‘news’ when apologising to the unjustly affected pages, partially reversing the blockage.
The wider public criticised Facebook’s conduct while media outlets have condemned the decision. Similarly, it attracted strong commentary from Australia’s political scene. Greg Hunt, the Minister of Health, depicted the behaviour as an “assault on a sovereign nation” and an “abuse of Big Technologies’ market power.” The deliberate, selective bans give rise to questions on matters of democracy and freedom of speech. Has Facebook’s ambition exceeded its social, stardom status?
Zuckerberg’s move can be found contradicting the objective of a “level playing field.” Further concerns revolve around smaller publishers that rely on social media for content promotion. In response, Nicola Mendelsohn, EMEA Vice President at Facebook, reminds users that publishers conserve a “choice” regarding operations on their platform.
Indeed, Google tends to be a favoured source of news while Facebook endures a sceptical reputation. Its trustworthiness as a source of information has been questioned over the years and only 4% of its traffic is steered towards news. This persona was utilized as a defence for the social media giant who declared the draft law to be a “misunderstanding” in its statement. Nonetheless, Reuters reported a 13% drop in traffic directed at news sites, suggesting a direct impact. The move also juxtaposes Facebook’s recent commitment to targeting misinformation in light of the vaccine rollout.
Domestically, the UK has acknowledged Australia’s approach, declaring its support. Regulatory agencies around the world seek to learn from the unprecedented move and focus on a parallel but amicable implementation. A collective effort may be fundamental in securing compliance.
Facebook’s Current Stance
Since the announcement, followed by public backlash, Facebook decided to retreat on its stance and restore news pages. Treasurer Josh Frydenberg confirmed that Facebook “re-friended Australia.” The company commenced striking licensing deals and as a token of good will, it pledged to allocate $1bn to enforce the provisions, in the next three years. The shift can also be partially attributed to last-minute amendments to the Bill that grant more flexibility. The enacted law contains a two-month extension to the time allocated for private negotiations before the intervention of a government arbitrator. It also takes into account any pre-existing deals.
By: Zuzanna Potocka