Facebook's Feud With Australia

Feb 25, 2021 By Diana P.
dianapiper's picture

A week back, Australians woke up to find that they could not share or view news on their Facebook feed.

It turns out Facebook had banned news content on their platform in Australia. 

The ban outraged the public, as they lost access to the news and several emergency, governmental, and charity accounts (Facebook has since restored them). Traffic on Australian news sites dropped 13%.

This feud raises important questions -- What is the relationship between new and traditional media? Should the government or the free market regulate Big Tech (companies such as Facebook and Google)?

Big Tech versus Big Media

Traditional media companies such as newspapers and magazines usually make money through ads on their pages. But these days, since people get their news off Facebook and Google, advertisers have moved to these platforms.

As a result, while Big Tech is making plenty of money from advertisers, the traditional media companies are struggling. This has also made it hard for smaller newspapers to hire staff to create original news stories. 

There are some who feel Google and Facebook have too much power over the market. They also accused the platforms of making money off others’ content by displaying news headlines and excerpts with advertisements next to them.

There is also concern that Facebook is not in the business of journalism and too much power will strengthen misinformation on the site. Moreover, Google News and Facebook News would prevent users from seeking out news independently. 

As social media increasingly becomes a news hub, Australia's new law is being watched around the world.

The Facebook-Australia Feud

Australia's new law requires Facebook and Google to make deals with news publishers to share news links. It also requires them to consult with publishers when they change algorithms that affect how the news sites are ranked.

Finally, when there is a disagreement with an Australian publisher, an independent arbiter will decide the fair payment that Big Tech should make to that publisher. 

Google backed down and started signing multi-million dollar deals with News Corp and other media giants. However, Facebook took the opposite approach and banned all news, government, and non-profit sites -- many considered this a heavy-handed step by Facebook. 

While this new deal will profit large corporations, like Rupert Murdoch’s News Corp, it is not clear how it will help small publishers. Small publishers do not have the same resources to negotiate with tech giants. Those who oppose this law say that the money shifts from the new magnates of social media to the old magnates of print media. 

Several countries will soon be challenging Facebook and Google. The U.S. is pursuing antitrust lawsuits. French media companies have already struck a deal with Google, and Canada and the EU are drafting similar legislation to Australia.

Big Tech’s era of freedom from regulation seems to be ending. What do you think - who is in the right?

Sources: Vox, Economist, CNN, NY Times, Al Jazeera, chron

Comments

Nahn's picture
Nahn February 27, 2021 - 8:11am
I think this isn't fair for the small businesses!