Facebook vs Australia, Who Wins the Debate?

Mish

Australia cracked down on Facebook and Facebook struck back. Here's a recap what happened.

Australia Cracks Down on Big Tech

Australia passed a law that would force advertising giants such as Facebook and Google to pay media companies for monetizing their news content when it’s posted to their social media platforms.

Facebook responded with an Overly Broad Content Block.

Last month Google also threatened to close its search engine in Australia if the law isn’t amended. But it’s Facebook that screwed its courage to the sticking place and flipped the chaos switch first.

The collateral damage was interesting.

In the wake of Facebook’s unilateral censorship of all sorts of Facebook pages, parliamentarians in the country accused the tech giant of “an assault on a sovereign nation”.

The Debate

If the tech giant was hoping to kick off a wider debate about the merits of Australia’s (controversial) plan to make tech pay for news (including in its current guise, for links to news — not just snippets of content, as under the EU’s recent copyright reform expansion of neighbouring rights for news) — Facebook has certainly succeeded in grabbing global eyeballs by blocking regional access to vast swathes of useful, factual information. 

However, Facebook’s blunt action has also attracted criticism that it’s putting business interests before human rights — given it’s shuttering users’ ability to find what might be vital information, such as from hospitals and government departments, in the middle of a pandemic.

The Real Story (According to Nick Clegg, Facebook VP)

Here is Facebook's "Real Story" take.

Last week, in a move that will have felt abrupt and dramatic to many, Facebook announced it was stopping the sharing of news on its service in Australia. This has now been resolved following discussions with the Australian Government — we look forward to agreeing to new deals with publishers and enabling Australians to share news links once again.

At the heart of it, in Facebook’s view, is a fundamental misunderstanding of the relationship between Facebook and news publishers. It’s the publishers themselves who choose to share their stories on social media, or make them available to be shared by others, because they get value from doing so. That’s why they have buttons on their sites encouraging readers to share them. And if you click a link that’s shared on Facebook, you are directed off the platform to the publisher’s website. In this way, last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million to the news industry.

The assertions — repeated widely in recent days — that Facebook steals or takes original journalism for its own benefit always were and remain false. We neither take nor ask for the content for which we were being asked to pay a potentially exorbitant price.

Under the Australian law, as it was proposed, Facebook would have been forced to pay potentially unlimited amounts of money to multi-national media conglomerates under an arbitration system that deliberately misdescribes the relationship between publishers and Facebook — without even so much as a guarantee that it is used to pay for journalism, let alone support smaller publishers.

It’s like forcing car makers to fund radio stations because people might listen to them in the car — and letting the stations set the price.

The discussion was entirely one-sided on Twitter. No one defended either Facebook or Google until I chimed in.

Copyright Issue?

If this was a copyright issue, then other media companies ought not be posting links to their articles on Facebook.

Google is a bit different as it does generate and post links. 

But the remedy is the same. 

All these media network companies have to do is tell Google and Facebook not to link to their stories. 

Facebook forced that issue, a bit clumsily, but brought its point home. The result was humorous.

Assault on a Sovereign Nation

Australia legislators accused Facebook of “an assault on a sovereign nation”.

What a hoot. 

Facebook and Google are so popular that they are considered vital to Australia which then demanded Facebook keep providing free services. 

Facebook and Google clearly win the debate. Companies can easily opt out if they do not want FB or Google to link to their stories.

It is in FB's and Google's interest to help companies that do generate content, but that is for FB and Google to decide, not a government mandated arbitration system designed to punish big tech.

For the record, I am not a Facebook fan and do not care much for its platform, security, sharing, etc. I do like Twitter and Google. 

Regardless of my likes and dislikes, newspapers are dying. So are book stores and even malls. Things change. 

The irony in this nonsensical debate is that Google and Facebook deliver hits to struggling news organizations and that helps keep them alive. 

Friendly Reminder Discussion

After Facebook pulled the plug, Australia changed its tune to Facebook's liking.

Mish

Comments (21)
No. 1-12
lrf2
lrf2

To the contrary, Google and Facebook use that content to generate billions in advertising revenue, with which they share none of with the content creators. They should... and they will.

Realist
Realist

As always, it is a complex issue. While I agree with Mish, and he does a good job of trying to “simplify” the issue, things are rarely that simple. I'm not a big supporter of Google or Facebook either, but I think they are bring attacked partly because of their success and fat wallets.

Cbb
Cbb

I support A government in this issue, FB and Google cannot threaten to stop services/pages of government institutions, each has their own web page and citizens can go directly,to these pages, same for the news media, each has their own website, nobody needs to reach through FB they can reach through direct web pages, FB and Google will loose this battle and this will be an example for other countries waiting to fight with Google and FB, FB and Google has to yield and share the money they make with content creators.

Doug78
Doug78

It's a competition issue. It's an abuse of their dominate position. Having vacuumed up ad revenue till they now have captured almost 90% of it. Starved of revenue the papers have to depend on Facebook for what's left. When they ask Facebook to share the ad revenue generated by the papers' content Face refuses and not only cut them off but also cuts off essential government information diffusion pages. Contrary to what Facebook says, that was not an oversight but a tactic. That's how monopolies work. Looking at it as a copyright issue is definitely valid but it's narrow legal view of the problem. Nevertheless it could be part of the solution in that Facebook's users could and should claim their data as copyrighted as well and demand Facebook pay the users a cut for the data Facebook sells to advertisers.

Too much BS
Too much BS

FB , Google Need to pay and respect royalty rights to all writers, designers and performers. Users on FB redirect works from artists and FB takes and steals the funds .

Casual_Observer
Casual_Observer

The internet needs to be more heavily regulated. We see elections being subverted and governments being overthrown. Who can blame Australia for cracking down.

Eddie_T
Eddie_T

What this all shows me......is just the ridiculous degree to which a few online platforms have taken over the world.

This impacts me mainly through Google, since I told FB and Twitter to piss off a long time ago. I can live without them...and I feel that I’m generally much better off.

I check Google News and use YouTube....so I’m still a pawn in this game.....but I try to be a smart pawn.....who knows about AI....and understands that all these companies are monopolies run by what amounts to children playing with matches.

I don’t see the big news media outlets as fundamentally different. It’s all bread and circus...combined with spin.

Btw, for those who spoke up for the content creators.....Legacy media is just as willing to screw them as Google and Facebook. They’re more alike than different in that regard.

Murdoch gets to spin his spin. Zuckerberg gets to spin his spin. The term “news” should now be defined as “infotainment with a social and political message” because all media sources have some kind of agenda now.

Who, What, When, and How......have been completely subsumed by Should and Shouldn’t.

I expect Legacy media to try to launch online platforms that will more directly compete with Google and FB.....but the online platforms do have an important first mover advantage and lots of cash.

Some accommodation will be worked out between Legacy publishers and the big social media giants.....otherwise the Legacy outfits will all fail and Zuckerberg and friends won’t have any content to link anymore. That’s the inevitable conclusion, if the courts agree with Mish, which I doubt they will.

Subscription services are an alternative for people who prefer their information less warmed-over and re-seasoned for your free clicking enjoyment.

Anda
Anda

Spain is a good example. A few years ago they implemented similar laws on sharing info from publishers, even short extracts. So Google news closed down there. Since then almost all online papers have gone subscription, usually a frontpage is about one third free and sometimes not even. These publishers have taken on all sorts of commercial sales pitch into the bargain, so you have to get past cookie notice, full page advertising and often interruptions with demands from publisher. Now, I read news to read opinion, not to be informed (or misinformed as Mark Twain once elaborated) , and that means reading widely and not taking info from a chosen (subscription) site only... in fact I would resent paying for propaganda and almost all outlets have their share. So paid access is not going to work widely, because a majority of people (as far as I make out) are just not interested . Also, paid content means publishers feeding the whim of a perceived majority of readers, so there goes objective reporting. In fact about the only outlets with open news are government run, so I suppose anyone knows where to get their info without having to jump through hoops nowadays... keeps it all very simple I guess :/ .

In short, IMO the best publishers are going to get are providers like google carrying extracts and links, with publishers earning advertising revenue from visits sent to them, and a smaller paid subscription base who are interested in more detailed sideline reporting and opinion adding further revenue.

Jojo
Jojo

The ultimate extension of this is that individual users could be made to pay for referring to an article via link to support a discussion.

The Web is built on links. In the USA there is also the fair use law, which is generally read to allow a small section of the link-to article to be quoted with the link. If you remove free linking, you effectively destroy the internet as it presently exists.

Eddie_T
Eddie_T

OT....interesting week ahead for gold. Technically there appears to be strong support around $1700. Gold is trying to find a bottom, imho, and we will probably drop down and test this support. The chart does suggest a possible capitulation in progress.

The dollar formed a swing low on Friday......it was the strongest day for the dollar in weeks...and if it can close tomorrow above the descending trend line.....around 91 or so it might have several more strong days.....this is negative for gold price imho.

Also, the rising bond yields are negative for gold price....but the expectation is that the Fed will not let the 30 year get much above the very long term trend line....now about 2.75%.

If the dollar were to break down,,,,,,,and the Fed intervenes and drives down yields by going on a bond buying spree...this could be where gold turns up.

I want to see if the dollar keeps showing strength before I buy back in on my fun trade....I don’t THINK it breaks down, at least not yet....so that makes me hesitant.

I’d also like to see this bond blow-out hit the top of the channel and turn back down.

If the dollar stays strong and bond yields stay elevated we might see gold drop down to a lower level of support. And there isn’t much lower support imho until 1550 or so. I don’t REALLY think gold will retrace that much.....but......

I understand short interest in gold has dropped a lot as of Friday. This week could be the bottom...but I’m not completely convinced yet.

Please share your thoughts, if you have any, about this subject.

PecuniaNonOlet
PecuniaNonOlet

It is the same story about who wins: crest vs colgate, At&t or comcast, Uber or Lyft, United or American. While we have the illusion of competition, it doesnt really exist except in superficial form. It is facebook or google, choose your poison. Ironically businesses and government that complain about this are the enablers of the problem.

I have long wondered why restaurants dont ban together and create their own uber eats like service and stop paying huge fees to uber eats.

So much for capitalism setting us free.

nicholasdouglas
nicholasdouglas

Though Facebook won,I was with Australia's concept! Advertising giant such as Facebook, Google, Youtube has been providing different news and information to the people across the globe. The alarm systems will be considered as the best way to protect your business and house property.


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