Facebook Just Caved on a Big Test for the Future of News

In an embarrassing reversal, Facebook has agreed to restore news links to its platform in Australia, and pay media organizations in the country for their content, a major concession that opens the door for other countries to bring in similar laws.

The Australian government announced on Tuesday that it had come to an agreement with Facebook over the country’s new Media Bargaining Law, which would force platforms like Google and Facebook to pay for news content.

Google initially threatened to pull its search tool out of Australia completely, but ultimately capitulated and struck deals with some of Australia’s biggest media companies, including Rupert Murdoch’s News Corp and Nine Entertainment. Facebook also threatened to leave the country. Last week, the company chose the nuclear option and blocked Australians from viewing or sharing links to local and international news sites. 

The move also accidentally blocked content from government agencies and emergency services. Pages belonging to state health and fire services, domestic violence services, trade unions, and the nation’s Bureau of Meteorology were also blocked.

The result was an international backlash against Facebook. The company was labeled “arrogant” and “unconscionable” by Australian Prime Minister Scott Morrison. Facebook maintains that news is a tiny part of the content on its platform, but its importance was clear when an analysis showed that in the absence of real news about the pandemic, disinformation about COVID-19 vaccines filled the void.

Within days of Facebook’s decision last week to ban the sharing of news links in Australia, Morrison had received phone calls expressing support from the leaders of the U.K., India, France, and Canada — which combined represent around 450 million Facebook users, or slightly less than 17% of its entire userbase. 

Now, Facebook is seeking to save face, and in the company’s retelling of what happened over the last week, it’s the Australian government that has compromised.

“After further discussions with the Australian government, we have come to an agreement that will allow us to support the publishers we choose to, including small and local publishers,” Campbell Brown, Facebook’s head of news partnerships, said in a statement. She added that that the company can still decide not to pay for news and reimpose the ban if it feels like doing so.

In reality, though, it’s Facebook, and not Australia, that blinked.

“It’s not a draw,” Tama Leaver, professor of Internet Studies at Curtin University in Sydney, told Reuters. “Even though Facebook managed to cover some concessions and the law is perhaps softer, I still think they were the big losers here simply because of the way that they tried to negotiate over the last week.”

Facebook’s decision to take such a public and drastic step to ban news was seen by many as simply a negotiating tactic in a bid to force the Australian government to bend its will. And now, it’s Facebook that has capitulated instead. 

Australia’s Media Bargaining Law is an attempt to bring some form of transparency and accountability to the ad market that is monopolized by Google and Facebook. News publishers rely on Facebook and Google to monetize their content via their ad platforms, but they are also forced to rely on them to distribute their content — via social media and search respectively.

After initially pulling all news links from their platform in Australia, and the subsequent PR disaster, Facebook sought to do damage control by claiming victory with some minor changes to the law, but it may already be too late.  

Australia is now being hailed by governments around the world as an example to follow when it comes to trying to reign in Big Tech.

“There is no doubt that Australia has been a proxy battle for the world,” Australia’s Treasurer Josh Frydenberg told reporters Tuesday. “I have no doubt that so many other countries are looking at what is happening here in Australia.”

It’s clear that other countries see Australia’s new law as an example of how they can hold Facebook to account.

In the EU, revamped copyright rules will go into effect across the bloc in June that will allow news companies and publishers to negotiate payments from digital platforms for online use of their content.

On Monday the pressure on Facebook and Google mounted even more when Microsoft announced that it was partnering with European publishers to push for a system to make big tech platforms pay for news.

And now Canada is poised to become the next country to force Facebook and Google to pay for news. Canadian Heritage Minister Steven Guilbeault told reporters last week that he would be drafting legislation in the next few months to require Facebook and Google to pay up. “Canada is at the forefront of this battle. We are really among the first group of countries around the world that are doing this,” Guilbeault said.

In the U.K., the government said Monday that it was “obviously concerned” at Facebook’s shutting off of news content in Australia, and Downing Street confirmed the culture secretary will meet representatives from the U.S. company this week.

But the Australian law is far from a perfect solution. A key concern is that the government now decides what is and what isn’t “a media organization” that should be paid by Facebook.  

“That's RIPE for abuse,” Cory Doctorow, an author and digital activist tweeted this week. “News organizations are expected to report on the government AND the government gets to decide whether they are entitled to participate in collective bargaining with Googbook, which could mean the difference between financial viability and bankruptcy.”

For governments around the world, Facebook’s capitulation in the face of a massive public backlash signals that the company has finally realized it has to pay for news content.

“The law is still the law, it's still set to pass, and journalism still wins,” Jason Kint, CEO of Digital Content Next, said in a statement. “Now Facebook has to contend with the rest of the world that has been watching carefully.”