Social media giant Facebook has threatened to block users from Australia from sharing any kind of news articles if a proposed news media bargaining code goes ahead. To stop this technology giants Facebook and Google will be required to negotiate with the Australian media companies overpayment for news content. They will also have to notify them of algorithm changes under the proposed mandatory code of conduct. But Facebook’s Australian managing director Will Easton released a post last week saying that they have been left with little choice in this matter.
Will Easton also aimed at the Australian Competition and Consumer Commission (ACCC), which had developed the draft code, accusing the organization of ignoring the role social media plays in promoting journalism. He further argued that in the first five months of 2020, users had clicked on Australian news articles shared on the platform for 2.3 billion times, which generated $200 million in revenue for Australian media organizations said the company.
Although the sharing of personal content between family and friends will not be affected and neither will the sharing of any kind of news by Facebook users outside of Australia will be affected said the social network head. The following of mandatory news code has been backed by all the major media houses including News Corp Australia, Guardian Australia, and Nine Entertainment as a way to reduce the damage caused by the loss of advertising revenues to Facebook and Google. It is understood that Facebook is still working through how any news ban would be implemented across any country. The social media giant has also updated its terms of services, which will come into effect from next month. Under these changes, Facebook would reserve the right to block information that could lead to regulatory impacts on its operations.
Google launches an attack on the Australian government over new laws
Supporting Facebook Google has already launched a strong opposition campaign to the laws, pushing an open letter onto its users. In this letter, Google argues its various free services in Australia, such as its search engine and YouTube, could be under threat and be stopped. The media has long argued companies such as Facebook and Google benefit from the work of journalists without even paying for access to those stories or articles or sharing any advertising revenue from their platforms. The Australian government has however said that its proposed laws are essential for creating a level playing field between its local media and big internet companies. Under these laws, Facebook and Google would be forced to negotiate payments with media companies in Australian for their content. And if no agreement is reached then they could be forced into an arrangement. This particular code would also require Facebook and Google to give advance notice of any changes made to their respective algorithms that could impact how news content was displayed. It would also set a standard for how Facebook and Google share data relating to how users accessed news content on various platforms. The ACCC had even lashed out at all claims made by Google. Emphasizing that it would have to start charging for its services, arguing that would only be as a result of the company’s own made choices. Further, it also denied suggestions that tech companies would be forced to hand over user data to various media companies Although public consultation on this code closed on last Friday, with the Australian government now considering the feedback from people. Facebook risks making its products less compelling for its users across the world. And if Facebook follows through with this threat, it will potentially lead to very uncompelling content on both Instagram and Facebook.
Social medial giants vs Australian media
Within a couple of years, the likes of Facebook and Google will devour more than half local ad revenues, leaving only a small fragment for traditional media players. Facebook Australia claims that the ACCC code misunderstands the algorithm of the internet and social media businesses. But on the other hand, it seems Facebook misunderstands how mandatory industry codes work. So if you want to be a part of the platform business in Australia, you have to follow the relevant code. If not then you may have to exit. Here the ACCC code is similar to the franchising code of conduct. For example, if you want to set up a pizza franchise in Australia, then as a franchise owner you have to abide by the franchising code of conduct.
These are the rules of the business in Australia because there’s a recognized power imbalance between franchisors and franchisees. The same scenario goes for news media businesses and various social media platforms. Facebook’s public response focuses largely on the exchange of money for broadcasting news content but the code given by ACCC is much broader than that; it’s not just a simple way for news media businesses to be paid. Defending itself facebook says a ban would be the only way to protect the Australian news and media sector. It fairly recognizes that Australian news content on various social media platforms provides value to both sides and any resulting payment is simply a net of that value.
Also, Facebook has suggested it will have to pay for every bit of news article that appears on its social platforms. The ACCC code allows for the private values of each news media business to be vehemently revealed during negotiations, which may end up in a price that is very low for Facebook, or even free at times. The ACCC, therefore, allows for both the news media businesses and social media platform businesses to negotiate, but this time Facebook’s threat suggests they are in no mood for negotiation.