Facebook and Google diverge in response to proposed Australian law

By Mike Isaac, Daisuke Wakabayashi, Damien Cave and Edmund Lee

For months, Facebook and Google have been locked in a stare-down with news publishers and lawmakers in Australia.

At the heart of the fight is whether the tech giants should pay news organizations for the news articles that are shared on their networks. Under a proposed law from the Australian Competition and Consumer Commission, both Google and Facebook would be required to negotiate with media publishers and compensate them for the content that appears on their sites.

Facebook and Google have fought hard to prevent the Australian law — which is expected to pass this week or next — from forcing their hands. But on Wednesday, the two companies sharply diverged on how to head off that regulatory future.

Google began the day by unveiling a three-year global agreement with Rupert Murdoch’s News Corp. to pay for the publisher’s news content, one of several such deals it has announced recently where it appears to be effectively capitulating to publishers’ demands.

Hours later, Facebook took the opposite tack and said it would restrict people and publishers from sharing or viewing news links in Australia, in a move that was effective immediately.

In conciliatory language toward publishers, Don Harrison, president for global partnerships at Google, said that the company had invested to help news organizations over the years and that it hoped “to announce even more partnerships soon.”

Facebook struck a distinctly different tone. “The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” William Easton, managing director of Facebook Australia and New Zealand, said of the draft Australian legislation.

The divergence illustrates the different ways that Facebook and Google approach news. For years, the two internet giants had treated news publishers more or less the same. Both had little incentive to pay news outlets for content and argued, correctly, that they helped drive a lot of readers to news stories that would otherwise go unnoticed on lightly trafficked websites.

But the steady decline of newspapers — juxtaposed against the billions of dollars Google and Facebook reaped in digital advertising — intensified questions over whether the platforms had a responsibility to financially support publishers. In recent years, both companies started paying news organizations through various programs as criticism about misinformation on their platforms seemed to heighten the need for quality journalism.

Now the situation in Australia has underlined that the lockstep approach can go only so far because Facebook and Google ultimately value news differently. Google’s mission statement has long been to organize the world’s information, an ambition that is not achievable without up-to-the-minute news. For Facebook, news is not as central. Instead, the company positions itself as a network of users coming together to share photos, political views, internet memes, videos — and, on occasion, news articles.

“Google is already used to playing a different game in every different country,” Siva Vaidhyanathan, a media studies professor at the University of Virginia, said of the companies’ different approaches. While he said Facebook was taking what it considers a moral stance, Google “may have gotten beyond this fantasy of a universalized approach to doing business in the world.”

The Australian Competition and Consumer Commission, the country’s top competition authority, has spent the past year drafting a bill for the Australian Parliament that would require Facebook and Google to negotiate with media publishers and pay them for content. The legislation includes a code of conduct that would allow media companies to bargain individually or collectively with digital platforms over the value of their news content.

Google and Facebook saw the proposed legislation as a worrisome precedent. As the negotiations over the proposal continued throughout 2020, both companies openly said that they might have to resort to more drastic measures against it.

In August, Facebook said it would block users and news organizations in Australia from sharing local and international news stories on its social network and Instagram if the bill were to move forward. Last month, Google also threatened to make its search engine unavailable in Australia if the government approved the legislation.

But in recent weeks, Google has sought to blunt the impact of the proposed legislation by striking deals with media companies such as Reuters and The Financial Times. Last year, Google said it would commit to paying $1 billion in license fees over three years to news publishers for content that shows up within Google’s News page, as well as Discover, the news feed that appears in Google’s mobile search app.

Google’s agreement on Wednesday with Murdoch’s News Corp. was particularly notable. Both have shown open animosity toward each other for years, dating back to the earliest days of the search engine.

Facebook’s decision on Wednesday was consistent with its past statements about blocking news links in Australia. The move could prove deeply difficult for Australians, with publishers no longer being able to share or post any content from their Facebook pages and users unable to view news articles shared on Facebook by overseas publishers.

Within Australia, Facebook’s news ban seemed to roll out haphazardly. News pages worked and then didn’t work, with error messages for some users and streams of posts disappearing for others.

But by 9 a.m. in Sydney, the impact was apparent and even more wide-reaching than Facebook’s statements suggested. In addition to news publishers being blocked, pages for Fire and Rescue New South Wales, the Bureau of Meteorology and state police departments had all been wiped clean. Even state government pages with public health information about the pandemic were blocked, prompting outrage from many officials and lawmakers, including Sen. Sarah Hanson-Young of South Australia.

In a statement, Facebook’s Easton said that the social network had largely helped the media industry and that publishers would not be able to increase their revenue in the same way without the company’s aid.

“The value exchange between Facebook and publishers runs in favor of the publishers,” he said. “Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.”

Josh Frydenberg, the Australian Federal Treasurer and deputy leader of the Liberal Party, said in a tweet that he and Mark Zuckerberg, Facebook’s chief executive, had a “constructive discussion” on Wednesday.

They would continue to “try and find a pathway forward,” Frydenberg said.

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