After a battle between Facebook and the Australian government over a law to regulate relations between traditional media in financial difficulty and the internet giants, an agreement was reached on news content.
Facebook announced on February 23 the lifting of the blockade in Australia of news content after a last-minute agreement with the government on the law to force digital giants to pay media for their content.
Finance Minister Josh Frydenberg has announced a compromise that will allow each party to save face. Found as parliament examines the bill, this compromise means that Facebook and Google – particularly targeted by the bill – will not be penalized if they make certain deals with local media to pay for the news. They were given two months to negotiate these arrangements and avoid binding arbitration.
With these changes, we can now work to continue our investment in public service journalism.
Thus, Australian media are expected to collect millions of dollars from Google and Facebook. For their part, the digital giants will not have to pay sums a priori higher than those granted and this will avoid an international precedent. “With these changes, we can now work to continue our investment in public service journalism and restore Facebook news to Australians in the coming days,” said Facebook Australia Managing Director Will Easton.
Hours after the compromise was announced, Facebook revealed a first draft deal with powerful Australian media group Seven West. “We have come to an agreement that will allow us to support the news groups we choose, including small and local,” said Campbell Brown, Facebook’s vice president in charge of global news partnerships.
Last week, Facebook outraged Australia and many countries by blocking the publication of news links from local or international media in response to the bill. Several official rescue services Facebook pages were unintentionally affected. Google, which for a time threatened to suspend its search engine in Australia, agreed last week to pay “significant sums” in return for the content of Australian press groups, of which the two main ones, News Corp. by Rupert Murdoch and Nine Entertainment.
The compromise announced was described as “reasonable” by commentators. “Anyone can walk away saying, we got what we wanted,” Rob Nicholls, professor of management at the University of New South Wales, told AFP.
Agreement stored in a drawer?
From the outset, the tech giants were opposed to this law intended to regulate relations between traditional media in great financial difficulty and the behemoths that dominate the internet and capture a significant portion of advertising revenue. They feared in particular a precedent which would threaten their economic model. They were also opposed to making these negotiations with the media mandatory and failing to reach an agreement, an independent Australian arbitrator would rule.
There is no doubt that Australia has fought a proxy battle for the entire planet
After this compromise, these measures will not come into effect considering that the digital giants have made a “significant contribution” to Australian media through unspecified “trade deals”. “We are now faced with the strange possibility that the code of conduct can be adopted by Parliament and that it does not apply specifically to anyone,” said Marcus Strom, union leader of the Alliance for Media, Entertainment and Arts. “It will remain in the drawer of the Minister of Finance as a threat to digital businesses that behave badly.”
Facebook, less dependent than Google on news content, said it had no interest in paying for information. “There is no doubt that Australia has fought a proxy battle for the entire planet,” said Minister Josh Frydenberg.
Critics of the bill believe that it sanctions successful companies and amounts to transferring money to traditional media in financial difficulty but with certain political influence.
The media sector has shed thousands of jobs in Australia over the past decade as advertising revenue flowed to big tech firms. Of the 100 dollars on advertising spent by Australian companies, 49 go to Google and 24 to Facebook, according to the Australian competition authority. While Google and Facebook seem to have found a solution in Australia, that doesn’t mean the end of their problems. The European Union, Canada and other countries also intend to regulate the sector. The two American giants have greatly benefited from the lack of regulation to become some of the most profitable companies in the world.