Facebook’s dispute with Australia over news is just the beginning

Facebook’s agreement with Australia provides a way to avoid the required payments to news publishers for news content, as long as the company is out to reach agreements with publishers.

“We appreciate that the government has created flexibility to continue making transactions with publishers, while giving us 30 days notice before an appointment,” said Campbell Brown, Facebook’s vice president of global news partnerships. If Facebook’s negotiations with individual Australian publishers do not satisfy the government, the company could reinstate its news ban rather than be forced to comply with the provisions of the new law for fixing payments.

“I am hopeful that the step will not be necessary,” she said. Brown said.

The agreed compromise would be an alternative to the voluntary payments that Facebook has made to news agencies ‘partners’ for its News Tab product for mobile users in the US and other countries.

The payments Facebook has made to date are not too expensive for the company, whose advertising business rose to a record $ 86 billion last year. News content accounts for only 4% of what people see in their headlines, Facebook said when it announced last week that it would remove news from the platform in Australia.

News Publishers Rely on Audience for Facebook and Alphabet Inc.’s

Google delivers. In the hours after Facebook decided to shut down news sharing in Australia, news publishers in the country dropped traffic with readers outside Australia by around 20%, data from research firm Chartbeat showed.

About 36% of Americans get their news from Facebook, according to a study by Pew Research in the fall of 2020, compared to 23% who get it from Alphabet’s YouTube and 15% from Twitter..

If Facebook had to pay for news content worldwide, the costs would be significant, said Eric Ross, an analyst at Cascend Securities. “Margins disappear if you suddenly have to pay for free,” he said.

The conspiracy between Facebook and the Australian news providers is occurring while Google is facing antitrust lawsuits in the US, and regulations need to be investigated elsewhere. Australia and other countries that want to pay for news content on behalf of publishers claim that Facebook is abusing its market power by trying to limit or avoid such expenses. A 2019 Australian report considers the major platforms to threaten busy social media businesses as well as advertisers and the news industry in general.

Both Facebook and Google say their platforms help journalism. As Facebook itself has noted, publishers worldwide are trying to maximize the attention their work gets on social media without any promise of compensation.

One U.S. news publisher said the Facebook dispute in Australia suggested that the social media company had renewed interest in paying publishers after previously being reluctant to do so.

“We’re at a tipping point,” said Maribel Perez Wadsworth, publisher of USA Today, the flagship Gannett. Co.

, the largest newspaper chain in the USA. “There is ultimately a much greater appreciation for the value of credible journalism.”

USA Today participates in the Facebook news site presented in the US through a licensing agreement.

News Corp.,

owner of The Wall Street Journal, has a commercial agreement to provide news via Facebook. Last week, the company reached a three-year agreement with Google to license content from its publication and produce new products for Google platforms.

Australia’s efforts could encourage non-traditional media, such as independent journalists who publish articles on writing platforms such as Medium, to demand payments, Bernstein analyst Mark Shmulik said. ‘The concern is: if we no longer draw a line at media conglomerates? “This is a path that Facebook does not want to take,” he said.

Earlier this month, Australian officials spoke with their counterparts from Canada, Germany, France and Finland about the countries that pay similar rules on technology platforms that pay news publishers, says Steven Guilbeault, Canada’s minister responsible for cultural policy, adding that the coalition of countries can expand. overtime.

Mr. Guilbeault said he was encouraged by developments in Australia and plans to introduce measures this spring that have the support of his global allies and relevant stakeholders. On Monday, Canadian Prime Minister Justin Trudeau spoke with his Australian counterpart, Scott Morrison, about possible co-operation in pursuing the regulation of online platforms, according to a summary of the conversation held by the office of Mr. Trudeau was introduced.

“We need to find a solution that is sustainable for news publishers, small and large, digital platforms and for the health of our democracy,” Guilbeault said.

The battle over payments to news agencies has been stifling – and sometimes boiling over – in Europe for more than a decade. A new European copyright law passed in 2019, and the involvement of antitrust regulators, has given new media leverage by, among other things, creating new copyright controls for press shops over the use of their publications on the Internet by technology companies, except in this case of very short excerpts and hyperlinks.

In France, the only country to have implemented EU law so far, Google signed licensing agreements for its News Showcase product last November with several publications, including Le Monde. The deal came after a French court upheld an order from the country’s antitrust regulator that Google should negotiate.

Google said it had signed News Showcase with more than 500 publications in a dozen countries, including Germany, the United Kingdom and Australia. Google pledged $ 1 billion in such licensing transactions in October last year, but declined to say how much of that amount was spent on Tuesday.

“We have hundreds of partnerships with big and small news publishers, making us one of the biggest funders of journalism,” a Google spokesman said.

Facebook said the publication of publications of their articles on its platform is a license under French law and remains unchanged. The company currently only shows links, rather than rich previews, when users post news articles from French publications themselves, unless the publication has explicitly given Facebook permission.

A Facebook spokesman said the company was in talks in France and Germany to launch its Facebook News product, which pays to receive licensed articles from news outlets. The product was launched in the UK last month with articles from publications, including the Guardian.

Facebook had earlier said it had provided hundreds of millions of dollars to publications through various advertising and subscription tools.

—Sam Schechner and Paul Vieira contributed to this article.

Write to Jeff Horwitz at [email protected] and Sarah E. Needleman at [email protected]

Corrections and reinforcements
Facebook earned a record $ 86 billion last year. An earlier version of this article incorrectly stated that Facebook was generating $ 70.7 billion in revenue. (Corrected on February 23)