ER4: An Australian Love Triangle/Shipwreck

Emmie Explains What's Happening Down Under

Welcome back to the Ethical Reckoner. The oddest love triangle has been making news, and it’s messier than the Kimye divorce. Facebook, Google, and the entire country-continent of Australia are fighting. My head has been spinning trying to parse out what’s going on, so I’m going to explain it and then tell you why you should care. 

First, the basics: The Australian government has proposed a new Media Code that would require individual data platforms to come to payment agreements with news providers whose content or links are hosted on a platform. The two biggest platforms that have been complaining about this are Google and Facebook, and we’ll talk about them separately. 

The bargaining requirement seems pretty fair when you think about search engines like Google. They skim so much content from sites for previews and sidebars that oftentimes when searching, you don’t even have to click through to the site to find the information you need. This directly deprives the site of traffic and thus ad revenue, which is how they make money. Because they’re taking the website’s content and displaying it in a way that obviates the need to go to the website without asking the site itself and the websites have no choice in the matter,* Google should pay them. It’s a little like if I planted myself outside a bookstore, asked people about to walk in what book they were looking for, then handed them the CliffsNotes. So, although Google threatened to pull its service from Australia, they instead signed deals with publishers to feature their content on “Google News Showcase,” a dedicated news silo. This may sidestep the letter of the law by not technically being the specified arbitrated agreements, but the assumption seems to be that no publishers will go after Google if they have some sort of deal in place. Facebook has a similar “Facebook News” tab in some countries (American readers: have you ever used this?), but it has seemingly lost the rollout race in Australia; they’re trying to accelerate the expansion so that they can negotiate their own deals elsewhere rather than be forced into arbitration, but have halted plans to expand into Australia for the time being. 

On the topic of Facebook, for that platform, the reasoning behind the law is less intuitive, and so we’ll focus more on it. Why should platforms have to pay Facebook for “content it didn’t take or ask for” when news providers use their free platform to voluntarily share content? This is Facebook’s argument; they claim that the Media Code “fundamentally misunderstands the relationship between our platform and publishers who use it to share news.” By their reckoning, the traffic they send to news publications is worth far more than the “business gain” to Facebook from news. Facebook says they’re doing publishers a service by allowing them to use Facebook to promote their content, and that if they have to pay publishers, providing this “service” won’t be worth it, and they’ll have to stop allowing news on the platform. They’re using this as a justification to go absolutely nuclear, blocking Australian users from viewing or sharing all news (domestic and international) and preventing users worldwide from seeing and sharing Australian news. In fact, Facebook has disabled the pages of Australian publishers altogether. What their argument ignores, though, is that the reason publishers are so reliant on Facebook is that online platforms like Facebook have fundamentally changed the online ecosystem in a way that publishers have been unable to adapt to. 

Facebook and Google effectively have a duopoly on advertising dollars on the Internet, which is growing as online ads prove more effective than traditional print ads. Together, they take 81 cents of every dollar spent on online advertising in Australia. Facebook claims that they do a net good for publishers, referring an estimated $315 million worth of traffic to Australian publishers in 2020 (which we should absolutely take with a grain of salt). And yet, news platforms are still struggling. The pool of ad dollars available for traditional media, even publications with an online presence, is shrinking as print ad spending is shifted to online ad spending—which benefits Facebook and Google far more than the media platforms. Given how much damage online platforms have done to newsrooms, the claim of benefits from clickthroughs may seem downright insulting. Besides siphoning away ad revenues, Facebook drove the disastrous “pivot to video” by inflating the view counts of videos, which may have directly cost hundreds of journalists their jobs. Permitting the unchecked spread of fake news has damaged trust in news organisations. Online platforms have capsized the boat publishers were sailing on and are holding them underwater. Should we expect the publishers to thank them for allowing the occasional gasp of air?

Australia is attempting to right the ship with the new Media Code, but as any sailor can tell you, there’s a right and wrong way to un-capsize. I’ll quickly run through a few of the concerns people have with the situation. 

The first, and easiest to dismiss, is cost to the online platforms. Google made $181.69 billion dollars last year; Facebook made a paltry $86 billion. They can afford to pitch a few million dollars to news publishers. 

More serious, though, is the concern that these payments won’t actually benefit journalists. Small publishers with under AUD$150,000 in annual revenue aren’t eligible for payments, and Rupert Murdoch owns News Corp., Australia’s largest publisher, so where the monetary benefits are going is unclear. There’s no requirement that the payments be used to help journalists, which is a major oversight. In fact, small publications are doubly impacted because they are more reliant on Facebook and Google for traffic.News may only be 4% of content on Facebook, but that’s still a huge amount number of links, and for smaller publishers these platforms are their lifeline—one Australian youth publication said that Facebook and Google account for 75% of their traffic. These small publications are getting the worst of both worlds—no clickthroughs, and no prospect of payments. Facebook has just plunged their heads under water again, but this time they may not be able to come up for air. 

The payment structure is the main concern directly relevant to the Media Code; most of the others are related to Facebook’s response. With the vacuum created by the news purge, there’s a major risk that fake news will rush in to fill the void. In a small experiment, the BBC found that after the ban, searches for posts related to COVID-19 and vaccines revealed more posts with “misleading content” than before. The Verge dismisses concerns about the rise in fake news that will result by removing high-quality news sources, asking, “But what if, in the meantime, Australians simply… visit websites? Subscribe to newsletters? Read… books?” The acknowledged naïvety is an understatement, as 39% of Australians use Facebook for general news, and 49% use it for news about COVID-19; for many, social media is the only way they access the news. In a poll by The Guardian, only 30% of respondents said that “If Facebook stopped offering news on its platform, I would use it less often.” Three-quarters claim that they would “Go directly to news sites to read content,” but Facebook is designed to trap users’ attention, decreasing the likelihood that users will venture off the platform. A whopping 69% of respondents agree that in the event of a Facebook-Google news ban, they would “Continue to use Google and Facebook and read less news.” Yes, it would be great if the ban re-routed traffic directly to news sites (not that it would help their advertising revenue) but in reality, Facebook and Google are major drivers of traffic for a reason: they give you news you’re interested in, obviating the need to go directly to the site and sift through the headlines. Also, for international viewers, let’s be real. When was the last time you checked the Sydney Morning Herald website? For many of us, online platforms are the way we find interesting news from publications we wouldn’t navigate to directly. Now, those publications have been left out to dry.

News publications aren’t the only ones suffering from Facebook’s actions. Claiming to be complying with the letter of the law, Facebook disabled the pages of local health departments, hospitals, emergency services, and even suicide and domestic violence crisis services. When protest arose, Facebook said the pages were disabled in error. Many of them have now been restored, but Facebook may have tipped its hand with its aggressive actions.

Facebook has also overextended in its argument for net neutrality. Net neutrality is the idea that all traffic on the Internet must be treated equally; an Internet service provider (or social media platform) should not treat clicking on a cat meme differently than, say, a New York Times article. Sir Tim Berners-Lee (the inventor of the Web) thinks that this could open the door to the death of the open Internet as we know it; Facebook is piggybacking on that argument. However, this argument ignores that in their furious counterattack, Facebook is violating the very principle it claims to hold dear. For many, Facebook is the Internet (both figuratively in terms of the attention share it has and literally when it provides Internet access to developing areas through its program) and so banning categories of content wholesale is itself threatening net neutrality. 

So, why should you care? In its hypocritical strong-arm tactics, Facebook has shown its hand. They’re claiming to have a beneficial effect on the news ecosystem, but then display their massive power by isolating whole swathes of it from the rest of the Internet. Traffic to Australian news sites fell by 13% the day after the ban, and this will have a disproportionate effect on smaller publications. Facebook is drowning publications while they claim to be showing how much they support free and independent journalism. 

Ultimately, this fight isn’t about who’s posting what content on the Internet. It’s about the fact that Facebook and Google dominate the Internet and have fundamentally changed the media and communications ecosystem such that news organisations are outcompeted before they can adapt.** They’re a rogue wave that have capsized the ship; there’s nothing the publications can do. They are clinging to the capsized ship, more and more reliant on the platforms that are don’t need them, a vampiric codependency that the publications will always come off worse in. And now, they’re trying to assert authority over a world government to maintain their power. Clearly, some action is necessary. Though the Media Code is promising, compelling payments only to large publications isn’t the way. Instead, we could tax data platforms and use the revenue to directly support journalism and address the externalities these platforms have caused. Or, social media companies could set up an independent foundation to support journalism. If Facebook and Google’s curated news services prove fair to journalists and unbiased in their news rankings, that could also potentially be a path forward.

This battle is only just beginning. Canada is pushing to create a similar payment structure, and in a wild twist, Microsoft is breaking with Big Tech and teaming up with EU publishers to lobby for journalism payments, which could impact initiatives in the EU and US. 

I was going to end here with “watch this space,” but as I was making final edits, the news broke that Facebook has reached a deal with the Australian government that will exempt it from the Code if it can show that it’s “made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements with news media businesses”—which seems to point to something like the Google News Showcase/Facebook News tab. This may open the door to smaller publications getting payments, which is good, but it’s a dangerous message to Facebook that strong-arming works. It’s absolutely remarkable that a private corporation can force an entire government to back down, and Facebook explicitly reserves the right to remove news again if they aren’t happy with how the situation develops.

How this will motivate other countries eyeing similar regulations is unclear. Will Facebook’s attempt at asserting dominance work and force them to back down? Or will its borderline authoritarian tactics encourage regulators to adopt even more aggressive strategies? 

So, still watch this space, because this—and the war to regulate Big Tech—is not over. And maybe, if you can, pitch a few bucks to a small publication you like. 

*Technically, you can de-index your website and prevent Google’s web crawlers from seeing it, but then you don’t appear on Google search, and that’s effectively suicide when Google has a monopoly on web searches. 

**Thanks to my ecologist girlfriend for setting me straight on extinction terminology.

Thanks for reading.

Emmie is an MSc student at the Oxford Internet Institute. Check out the archive of past issues here and if you haven’t already, click the big “subscribe” button to get the Ethical Reckoner biweekly. Any suggestions or comments? Let me know on Twitter @EmmieHine.