'Facebook has played its trump card'

Facebook has threatened to block news altogether for Australian users of its platforms should the government's proposed news media bargaining law be passed, a shocking move that media experts say shows just how concerned the tech giant is about a regulation domino effect.

The social media network has made no secret of its opposition to Australia's proposed media law, being drawn up by the Australian Competition and Consumer Commission, that would require digital platforms to make changes to their business models. The draft code from the ACCC covers not only a process for negotiating payments with publishers but also several other areas the tech platforms have objected to strenuously, such as a requirement to notify news publishers about algorithm changes in advance. 

When the Australian government first announced plans to draw up the mandatory code in June, Facebook compiled a fiery 58-page response that labelled the code "unfair" and "discriminatory". At the time, it warned that news content is "highly substitutable", suggesting that it would not incur any significant impact if it were to remove news from its platforms completely.

That was not an empty threat, it transpired on Monday (August 31). In a blog post attributed to Will Easton, MD of Facebook for Australia & New Zealand, the company has said it will prevent the sharing of local and international news content on Facebook and Instagram in Australia if the law is passed.

"This is not our first choice—it is our last," Easton wrote. "But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector."

Belinda Barnet, a senior lecturer in media at Swinburne University of Technology in Melbourne, tells Campaign Asia-Pacific that this is Facebook's "trump card". That's a double entendre, because Facebook's biggest concern is that this law will inspire major markets like the US to follow suit.

"This is the biggest thing Facebook can do that would have the most impact on news outlets and on Australians," she says. "Clearly it is intolerable to them; the idea that Australia will set a global precedent and other countries might join them."

"Australia is a fairly small market, but if somewhere like the US or UK look to Australia and this legislation and decided to implement it in their own countries that might make a difference to Facebook’s business model, so it is very threatening to them," Barnet goes on.

Barnet adds that Facebook's response is more extreme than its peers, because news content is "much more important to Facebook than it is to Google". A third of Australians—equivalent to between 8 to 9 million people—get their news from Facebook. 

"That is a lot of eyeball time for advertising and a huge amount of data. Everything from political preferences to socio-economic status—all of this is reflected in the type of content you read, click on and post. That is rich data for Facebook to be giving up," Barnet says.

"They have been watching for some time while Google has been in the ring huffing and puffing," she says. "But clearly it is important for them to protest this in the biggest way they can do it." 

Google Australia's managing director Mel Silva has been publicly sparring with the Australian government over the past few months, penning several blogs that call the code "unworkable" and suggesting that Google would be forced to provide users with a "dramatically worse" experience in search and YouTube under the proposed rules.

Several commentators on social media have questioned how Facebook will practically prevent all users in Australia from sharing news. A Facebook company spokesperson said: "We’ll provide specific details soon on how we plan to remove news content on Facebook in Australia."

Other commentators have pointed out that one adverse effect of denying Australian users access to trustworthy news is that misinformation could rise to the top, especially concerning when the world continues to battle a global pandemic.

Take a moment to imagine what happens with misinformation and conspiracies if Facebook bans legitimate news media in Australia, which presumably will include the fact-checkers. Picture that merrily blazing bin-fire.

I'm not sure how well Facebook has thought this through.

— Elise Thomas (@elisethoma5) September 1, 2020

While a move of this severity could spark user outrage in Australia, Barnet believes that Facebook will use its platforms to spin the messaging in their favour.

"I suspect when they implement it they will use pop up messages telling people they can’t share news content because of the ACCC, directing anger towards the government," she suggests.

Simon Larcey, the managing director of Viztrade, which provides programmatic services to regional and independent publishers in Australia, says news publishers stand to lose the most from this threat.

"They rely on traffic to monetise their sites and with 50% less traffic, we are going to have a bad situation going to worse. All publishers benefit from free traffic flow from Facebook and Google. Any news publisher can promote their stories and link back to their sites and increase traffic. Only large publishers with huge traffic will benefit from payouts from Google and Facebook. The smaller publishers will see micro payments that will have no effect of their bottom line," he says.

"The government need to find a better way to help publishers build a sustainable model. By putting the hard word of Facebook and Google, it may cause more harm to news publishers than good," Larcey adds.

Facebook last week rolled out Facebook News, in which it pays publishers to carry their content, to five key markets including India, the UK, Germany, France and Brazil, after debuting in the US last year. In Easton's blog post, he said Facebook had hoped to bring Facebook News to Australia "but these proposals were overlooked".

While Facebook News goes some way to answering woes about the value exchange of publishing on the platform, Barnet says the Australian government's issue with the product is that "they [Facebook] want to do it on their own terms".