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Facebook Is Right to Call the Australian Government Bluff

As mentioned in previous analyses, the way that the Government has approached its battle with the digital giants has been flawed from the beginning.

True, its tough stand had made Google pay media companies well above what these companies would have been able to negotiate individually with Google, but the fundamentals of why these battles are taking place are still unchanged.

Google was prepared to pay these ‘premiums’ to make sure that its business model would still survive. It is the company’s advertising business model that it was keen to protect, and for that reason, it was prepared to pay off the news companies. So nothing fundamental has been solved by the Australian Government through its media code. It is now simply waiting for the next battle, and the regulator (ACCC) has also already foreshadowed that it will concentrate on that advertising business model. This will be a much tougher battle that Australia will not be able to win on its own. Google will use its full legal power with gigantic financial resources to defend its business.

It also shows that actions from individual governments are counterproductive. The French, who took a different approach, got only a fraction of the money for its media companies than that Google has paid to Australian media, so how will that make the French feel. Only united action against global digital moguls will lead to structural changes, and I have mentioned some of such structural changes as proposed by the EU: Can we control the Digital Platforms.

Now on to Facebook. I totally agree with Facebook that the Government’s action in relation to the way that Facebook distributes news is out of all proportions and, as a matter of fact, totally wrong.

All news organizations around the world totally voluntarily distribute their news to whoever wants to use it. Facebook is not involved in this at all. Unlike Google, it doesn’t abstract content; it doesn’t create news snippets, and it does not distribute links.

All of this is up to the news companies who are providing their services via Facebook. It is totally up to them if they provide full articles, snippets, links, send users to paywalls, etc.

It is true that all the information that Facebook now blocks can be obtained elsewhere. However, Facebook is such a well-known, integrated platform used by most Australians that it will be the organizations who provide services on the platform and who are now blocked, who are the ones who suffer from this action.

I would think that common sense here will prevail and that the Government will limit the media code to those digital companies that are actively making money from the content of others. Unlike Google the media code doesn’t really effect their business model, so there was no need for them to negotiate as there was, as a matter of fact nothing to negotiate.

If the Government wants to stick to its media code, it will also have to make Twitter, LinkedIn and others pay for the same service that Facebook provides. You could even argue that telephone and postal service which are used to distribute news should fall under that code, of course totally ridiculous.

It is also in the Government’s own interest that it can continue to use the Facebook platform to distribute its own news. Once again, there are other ways to do that, but the reach of Facebook is unsurpassed and, as such, very valuable for the distribution of such information.

Do I let Facebook off the hook? Totally not, but if we want to get control over the digital media and avoid the damage they are doing to our society, economy, and democracy, we need to be far more strategic. We globally will need to work together on those issues.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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I'd beg to differ. Facebook makes money Todd Knarr  –  Feb 19, 2021 4:39 AM

I’d beg to differ. Facebook makes money off the news stories presented on it’s site the same way Google does: advertising. Everything people post, including the official pages of news sites, is the content that draws viewers to Facebook, and Facebook then presents ads to them intermixed with the content and makes it’s money selling that advertising space. Much the same way newspapers themselves do, in fact. The only difference is that on the official pages of news organizations it’s those news organizations themselves posting the stories, and I have to ask why, exactly, should Facebook pay those news organizations for those news organizations posting stories and links to stories through their official pages?

Of course, the bulk of the news content on Facebook isn’t from official pages. It’s links to news stories posted by users. In that, Facebook is involved in the publishing to exactly the same extent that Google is. Probably more so in that with Facebook the news publishers have no way to tell Facebook not to let users post links to their sites while with Google all it takes is two lines in the robots.txt file to make Google cease indexing their site completely. That the news organizations won’t take the effort to add this to robots.txt:

User-agent: Googlebot
Disallow: /

should tell you all you need to know about how badly those news organizations want to have their content not listed on Google.

Facebook Paul Budde  –  Feb 19, 2021 7:55 AM

Thanks for your comment Todd. I am not quite sure about your reply. In yr first para you seem to indicate that Fb should pay and the way I read the 2nd para you seem to indicate that Fb shouldn't pay. My point is that the news organisations voluntarily and for free are able to distribute their news to millions of people. Unlike Google, Fb doesn't create snippets or actively send out links. So one could argue that Google should pay but I can't see why Fb should pay. However, as I mentioned at the end there needs to be a total overhaul on how the digital platforms operate.

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