The News Media Bargaining Code of July of 2020 under the Treasury Laws Amendment covers news media and the digital platforms they share content and garner traffic on. On Thursday 18th February, Facebook blocked news sites from sharing and viewing news links across the platform for Australian users. Using their machine learning system led to classification errors with charities and government pages regarding COVID-19 vaccines. In addition, other emergency services were blocked from sharing information.
The proposed law, which has passed the lower house and is due in the Senate this week, would oblige digital platforms (including Facebook) to pay news media outlets to share or host their news content. If a deal could not be made between the social media sites and search engines media and news sources, an independent arbitrator would decide the payment amount. The arbitrator panel would set a price for news in cases where platforms and news media could not reach an agreement. In these cases, the arbitration generally rules alongside the news publisher.
Google initially disagreed with the proposed law and signalled they would leave Australia. However, when competitors like Microsoft’s Bing came out in favour of the law, Google backtracked and began making payment deals with media companies.
News media content plays a large role in Google's business model. While it only accounts for 4% of Facebook’s interaction (classified as journalism), over 11 million Australians get their news from the social media platform. Last year, Facebook in Australia garnered 5 billion clicks to news media companies worth an estimated AU$407 Million.
William Easton, Facebook’s regional Managing director, is quoted on the matter, "The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content". Mr Easton went on to further state, "It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter."
On Saturday, Australian Prime Minister Scott Morrison announced that Facebook was back at the negotiating table. Facebook's actions angered many Australians and have given the social media company, already littered with recent image perception problems, even more to chew.
The company remains opposed to the law. If the law should pass and digital platforms capitulate, more countries will likely follow, with Canada being one of them. Canadian heritage minister Steven Guilbeault, has commented that Canada would adopt a similar approach to that taken by Australia.
Facebook has cited three main objections to the bill.
- It would no longer allow the social media giant to discriminate between news outlets who ask for money.
- Arbitration models would allow an independent body to select one payment over another.
- The obligation to enter commercial negotiations with Australian media companies.
On the day of the mass blocking on Facebook, traffic to the news outlets' websites fell by 13%. Many outlets depend on the traffic from social media platforms to their host sites and their listing on Google. Initially, with Google, News Corp was upset over the web crawl selecting the most relevant and allowing snippets of articles away for free as many News coverage sites now operate behind a paywall.
Further criticism at Facebook's decision to block news sources was levelled as many fake news stories and conspiracy theories were still shared. However, this is because such posts are not classified as news, and thus do not fall afoul of Facebook’s filter. Further, many fact-checkers were also blocked because their listing was classified as news.
Additionally, the bill would allow News Media access to ranking algorithms and user data under specific requirements to learn how to target their news better at audiences while receiving payment from the digital platforms affected.
In the Australian digital market, this would give traditional news media an unfair competitive advantage on platforms. YouTube in Australia will have to change its platform if the bill is passed. News media companies like News Corp Australia, owned by News Corp (an international conglomerate) and other large conglomerates, would primarily benefit from this bill. Independent and local news media who struggle on digital platforms already don't look like they will benefit from the current structure as their bargaining value is low.
While Google agreed to pay up and is still currently cutting deals with news media, Facebook is always at the table but is adamant; it remains opposed to the bill.
Serious questions have been raised in this episode over whether the government should be introducing bills to support traditional big news outlets that have been losing out on digital platforms and social media platforms. It is unclear if they should be funded and assisted by legislative penalties against social media platforms including Facebook.