Facebook will remain scarred by its antics over the Australian news media bargaining code
Facebook’s agreement to pay for news is a good outcome for major Australian media outlets, but the social media company’s relations with the Australian public will remain scarred.
It’s hard not to describe an estimated overall pay out of hundreds of millions of dollars to media companies as anything but a good outcome, considering where proceedings were until recently.
Until a few days ago Facebook claimed news offered it only a marginal financial benefit, and the only news displayed was that posted by users. It had virtually no interest in carrying news. It abrogated any responsibility for the state of journalism in this country.
By agreeing to making payments to news organisations, the philosophy around Facebook, news organisations and journalism has changed.
It’s a shame that it took mandatory measures and the threat of baseball arbitration to achieve this. Baseball arbitration is where both sides in a dispute put up final offers for a deal and an arbiter decides an enforceable deal. It’s an outcome the big tech firms wanted to avoid at all cost.
However mandatory measures were well justified considering the history of this dispute.
Australia’s competition regulator, the Australian Competition & Consumer Commission (ACCC) began actively pursuing the big tech firms in the wake of the Facebook Cambridge Analytica scandal, and everything has been on the table.
This includes privacy adherence, transparency on how information is collected and used, digital advertising, general monopolistic behaviours, mergers, and tax.
When the ACCC’s digital platforms report was handed down in July 2019, managing director of Facebook Australia and New Zealand, Will Easton said Facebook had already been working with the ACCC for 18 months. That shows how long big tech had been talking with the regulator. But progress has been painfully slow.
On the issue of payments to media organisations, the ACCC attempted over a long period to forge a voluntary agreement with Facebook and Google, but they never agreed on this. The government and the regulator eventually lost patience, and in April 2020, Australian Treasurer Josh Frydenberg asked the ACCC to develop a mandatory (compulsory) code governing how the big tech firms deal with media companies.
Big tech has no one to blame but itself for compulsory measures unfolding.
Baseball arbitration remains the ultimate weapon to force a deal. To some, such a cavalier approach may seem unjustified, but one only has to look at how negotiations with the tech giants have dragged on for years, and secondly, the US precedent.
For example, the US Oracle versus Google court case over the use of the Java programming language has dragged on for a decade. From 14,000 kilometres away, this seems a totally ridiculous misuse of the court system.
History shows you need the proverbial brick wall at the end of the roadway to force an outcome with big tech, and that’s what baseball arbitration offers.
The new amendments soften its impact somewhat. In his statement yesterday, Facebook VP global news partnerships Campbell Brown said “the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation”.
It means that if Facebook is pinned against the wall by baseball arbitration, it can call “no deal” and delete posts from a news site. The new measure may still be baseball arbitration, but you can take your bat and ball and go home.
Things are now moving quickly. More deals between Facebook and news organisations are under way with Facebook already signing a letter of intent with Seven West Media.
Facebook also has pledged to restore the news media sites it took offline last week. The Australian Senate is now debating the media bargaining code law with the new amendments, and it is expected to become law maybe later this week.
The amendments offer a more fluid negotiating framework. Big tech firms that do the right thing and generate a history of supporting Australian journalism can avoid the compulsory provisions of the code and make deals with media companies away from it.
When subjected to the code, there is now two months for mediation before baseball arbitration kicks in. This offers more scope for deals before that brick wall is hit.
The code prior to these changes included a “non differentiation” clause which meant the tech companies couldn’t include or rank media content differently or treat firms more or less favourably depending on whether they had an agreement with that company.
Now news media who sign agreements involving money or the supply of news can be treated differently.
There is some uncertainty how the revised code will play out for smaller media bodies. If Facebook is judged to be a good contributor to journalism overall, would its exemption to the code allow it to shrug off any negotiations with smaller players? We shall see.
Despite this resolution, big tech continues to be regarded with increasing suspicion by the Australian public.
Google’s threat to ban search followed by Facebook’s algorithms blocking out not only news organisations, but the content of health services, Indigenous services, a fire response authority, a children’s hospital, domestic violence support and numerous businesses were publicity masterstrokes for getting out the message of what bastards they can be to literally everyone.
For businesses, finding your Facebook site devoid of content would have come as a shock, both in terms of a huge decline in traffic and financial loss.
The spectre of Google and Facebook as benevolent companies offering free, shiny online and mobile toys is gone.
It was also exposed that this country has a huge over reliance on services using Facebook sites as the key avenue for contact with followers. Last week, some people complained they couldn’t contact services because of the ban, but they only needed to type a URL into a browser. They’d forgotten this was possible.
Before this final deal, we started to see media organisations including The Australian and the ABC actively promote public content via their app and websites rather than through Facebook.
Even with this deal, Australian organisations would do well to keep promoting other ways for their followers to connect to them apart from Facebook. They don’t have to close their Facebook sites or end their Facebook advertising, but they should begin to wind back community dependence on Facebook portals.
As Mr Brown said, Facebook reserves a right to close down news sites. Presumably that applies to other Facebook sites. Nothing is in stone.
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