The Facebook fall-out from Down Under
Aussies don't like being pushed around by anyone, especially Mark Zuckerberg. Ray Snoddy looks at the ramifications of Facebook blinking first in the battle Down Under
Mark Zuckerberg took on the Aussies and the Aussies won.
The Facebook founder showed remarkable arrogance and insensitivity –some have also called it bullying- in publicly taking on the democratically elected Government of a sovereign nation, thereby disadvantaging millions of its citizens.
Of course it has been known, at least instinctively, for years that organisations such as Facebook were global players undermining many areas of national sovereignty, everything from paying inadequate levels of taxes to sucking the advertising lifeblood out of domestic established media without being willing to pay fair compensation.
The process happened gradually and it was difficult to define a moment, a level of monopoly, or manifest social harm, where governments would unilaterally decide to say ‘enough is enough.’
Zuckerberg’s decision to remove all news from its platforms in Australia in reply to planned legislation, has ended all that and clarified many political minds.
The provocative action by the Facebook founder was a major blunder. It was a crazy thing to do in its own right but to choose the Australians as your first opponent in such a battle was down-right demented. For historic reasons the Aussies don’t like being pushed around by anybody.
One can only hope that senior Facebook advisor Sir Nick Clegg privately argued against such a self-destructive Facebook move and was overruled, otherwise what is the point of his position – apart from a large salary.
Strangely, there has been far too much “blinking,” as in who blinked first.
“Oz blinks first in Facebook row” was the headline in the Daily Mail.
“Facebook ‘blinked first’ in its row with the Australian Government amid international criticism of its decision to remove all news content to avoid paying publishers, one of the company’s former executives has said,” was how The Times reported the compromise reached between commercial enterprise and sovereign state.
The Times got it right. News is now being restored to Facebook services throughout Australia.
Mark Zuckerberg over-reached himself in a way noted by many other countries, including Canada and the UK.
A dam has been breached and pent-up unease, which has built-up over many years about the growing dominance of the social media player, released.
“Little” Australia, population 25 million, decided it wasn’t going to have sand kicked in its face.
Facebook will now have to pay for using professionally produced news and some estimates suggest that Australian journalism could now benefit to the tune of more than £100 million a year from social media giants.
The only substantial areas of compromise are that Facebook can avoid a new code of practice if it reaches agreement with enough news organisations, and that there will be two-month mediation periods before binding arbitration in the event of disagreement between Facebook and news organisations.
We can call this moment as the high-water mark of Zuckerberg’s influence - if not his personal wealth.
Facebook really cannot have it both ways. It has the advantages of a creating a utility, if not near monopoly, without being willing to take on the responsibilities and obligations of such power.
That unsustainable position has now been publicly exposed.
Going forward, legislators should extend their gaze from trying to surpress hate crime, conspiracy theories and dangerous misinformation, to ensuring that media organisations receive fair compensation for expensively produced information.
Around the world, many newspapers, particularly local newspapers, are struggling because of Facebook.
Whether Facebook likes it or not, the Australian model could become the template for other nations keen on reining in the social media group.
There is another, perhaps more benign template, to govern the commercial relationships between established media organisations and social media operators.
As Mark Zuckerberg was deliberately provoking an international incident in Australia, Google was quietly getting on with negotiating a news deal with Rupert Murdoch’s News Corporation.
News Corp publications have agreed a multi-year partnership with Google to join Google’s News Showcase for “significant payments.”
No numbers were given but presumably News Corp has found the deal to be very much in its financial interest to provide content from the Wall Street Journal, Barrons and the New York Post to The Times, Sunday Times and The Sun.
Ironically, in the circumstances, the deal also covers News Corp’s publications in Australia, including The Australian and Sky News Australia.
The creation of the Google News Showcase app is, rightly, being seen as a Google olive branch to improve relationships with publishers worldwide.
According to Enders Analysis, Google has put $1 billion on the table to pay for deals with news organisations worldwide and so far, 450 publications in a dozen countries have signed-up.
The money, which amounts to less than 0.5% of global newspaper turnover, is hardly going to change the world, but in present circumstances it will be very welcome.
It does however establish the principle of paying at least something for professional news content and such a principle could be developed over time.
Making $1 billion available to reduce tensions with news organisations and avoid the elements of compulsion in the Australian model elsewhere looks like good business for Google.
Above all else, Google has avoided Facebook’s PR disaster, which will continue to resonate internationally.
The call for similar legislation to that of Australia, probably including the agreed compromises, is likely to increase in countries such as the UK and Canada.
At the very least, the Johnson Government is promising a consultation later this year on the possibility of new legislation.
That's in addition to the special unit being set up in the Competition and Markets Authority to look at whether the digital tech companies are exploiting dominant positions in advertising markets.
As Facebook retreats hurt from its Australian debacle, the Facebook Oversight Board, set-up to rule on what content should stand and what should be taken down, has an important decision to make.
The illustrious members of the Board, who include Helle Thorning-Schmidt, former Prime Minister of Denmark and Alan Rusbridger, former editor of The Guardian, have to decide whether Donald Trump’s Facebook ban should remain.
Trump is permanently banned from Twitter and the same should happen at Facebook.
After all, a majority of Senators found Trump guilty of encouraging an insurrection, even though there was not the two-thirds majority necessary for impeachment to succeed.
It might do something to repair Facebook’s reputation if the independent board were to take a tough decision on Trump who, after all will be able to get plenty of publicity in the next few years – in a succession of court appearances.