So who has really won in the battle between Facebook and the Australian Government over whether Facebook should be forced to pay for displaying news content on its platform?
Facebook’s cack-handed decision to withdraw Australian news and inadvertently essential government information from its platform drew opprobrium from around the world – and quite rightly so in my opinion.
As a monopoly operator, its decision to withdraw its platform has been described as bullying tactics.
Whether you agree with Facebook’s argument or not – that the government’s code fundamentally misunderstands the workings of publishing on the internet – a view supported by the internet’s creator Sir Tim Berners-Lee – the fact of the matter is this:
Facebook has been instrumental over many years in executing a strategy that has played a major role in irreversibly destroying the business model upon which publishers relied – a combination of advertising and newspaper sales revenue – to pay for journalism.
So far, this is ok – if you believe in fair competition. However, Facebook continues to benefit from the investment in journalism – that makes part of its platform so attractive, by linking to that journalism – while hitherto providing no financial compensation to the owners and creators of that journalism.
It has also, by creating a behemoth of a social media platform that has little if any regulation, allowed itself to be the purveyor of views and opinions that incite hatred, bigomy, racism and, through its Instagram site, even been directly linked to the death of 14-year-old Molly Russell. Only recently has it put in place attempts to moderate this content – and cannot do so completely.
My point is this: Facebook and its associated platforms are in a market dominant position and can abuse that power and influence to further its strategies – leading to the obliteration of a regulated media industry.
The regulated industry plays a vital role in the democratic process (ref Cairncross Review) and through regulation guards against the promulgation of unlawful views.
If the journalism that provides that content disappears because it cannot continue to exist or create a new business model – then this world will be a darker place.
So, back to the argument over whether Facebook should be forced to pay for the content it does not invest in but merely showcases. It is naive for anyone to believe Facebook’s argument that it does not benefit from doing so and, indeed, by linking to that content, it rewards the publisher through providing it audience reach it would not otherwise have.
The return on that investment to the publisher is miniscule and does not pay for the cost of providing that journalism.
And this is what the Australian Government was attempting to rectify in the face of a failure by the Tech platform to want to compromise. Facebook tried to flex its not inconsiderable muscle, and in a show of its monopolistic power, withdrew its service.
The coverage of this conflict has gripped the media world, brought politicians from around the globe into the debate and has focused on whether or not Facebook, or for that matter Google, should pay for other people’s journalism.
So now, on the eve of the Australian Government passing its new media code, it is widely reported that Facebook has capitulated and is back at the negotiating table with publishers.
The change in the code means the government may not apply the code to Facebook if the company can demonstrate it has signed enough deals with media outlets to pay them for content. The government has also agreed that Facebook and other platforms which would be subject to the code would be given a month’s notice to comply.
So far so good. As reported widely, these are deals that Facebook already has in place with other publishers in the US and the UK as it rolls out its News Tab.
As ever, the devil will be in the detail. I ask you to consider the words of Facebook’s Australian managing director, Will Easton.
He says: “After further discussions, we are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognise the value our platform provides to publishers relative to the value we receive from them.”
The deals that Facebook have offered to publishers elsewhere in the world are a take it or leave it “offer”. There is no or very little scope to negotiate on the value of that commercial deal. I know, I witnessed this.
It reminds me of what has happened with the power of the supermarkets “negotiating” the value of milk from farmers. Once they are in a position of market dominance, the farmer has very little bargaining power and has seen his margins disappear.
So, while on the face of it, this looks like a climbdown by Facebook and media pundits are celebrating, my advice is to beware.
Firstly, the level of value being placed on that journalism has so far, in my experience, not been open for negotiation – perhaps Australia’s code will safeguard against that.
Secondly, unless media businesses find a legal way to combine to negotiate with Facebook – perhaps through their professional bodies – a divide and conquer strategy will ensure the true value may not be realised.
And thirdly, this is not a panacea for journalism.
It remains that more far-reaching regulation and compensation models are needed to redress the balance that is so heavily weighted against the interests of publishing businesses compared with Tech giants.
This blog is my personal opinion: If you have an opinion about this, please feel free to email me firstname.lastname@example.org