As Australia Reaches Deal With Facebook Following News Blackout, Critics Warn Corporate Power Plays Won't Save Journalism

Big Tech's vast power remained under scrutiny on Tuesday after Facebook announced it would lift the blackout it had imposed on Australian news outlets in response to proposed legislation aimed at making large platforms pay publishers for linking to local news stories.

"Facebook should not be so big as to be able to dictate its own terms with any government," liberal group Sleeping Giants wrote in a Twitter thread. "Breaking apart Facebook is absolutely essential to reining in their power and control."

The tweets followed talks between Australia's Treasurer Josh Frydenberg and Facebook CEO Mark Zuckerberg regarding the proposed News Media Bargaining Code, which, as NPRsummarized, "would force Google and Facebook to pay Australian news publishers for stories with terms of a deal set by a third party, had they not been able to negotiate payout agreements with local publishers themselves."

While Google recently struck a deal with Rupert Murdoch's News Corp. regarding payments, Facebook's response last week to the proposed code was to go "nuclear," as Common Dreams reported, blocking Australian users from sharing news and preventing Facebook users worldwide from sharing news from Australian outlets.

Campbell Brown, Facebook's vice president of news, said in a statement that "the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them."

According to the Sydney Morning Herald,

The Morrison government agreed to last-minute changes to its proposed media bargaining code on Tuesday in order to bring Facebook back to the negotiating table with news companies. The amendments pave the way for Google and Facebook to avoid the code altogether if they can satisfy the government they have struck enough deals outside it. [...]

Seven West Media chairman Kerry Stokes announced on Tuesday evening the company had signed a letter of intent with Facebook for the use of its news content. [...]

Industry and government sources said Nine has restarted negotiations with Facebook. News Corp and the Guardian Australia have also resumed talks with the social media giant.

"Under several amendments to the code," the New York Timesreported, "Facebook would get more time to cut deals with publishers so it would not be immediately forced into making payments. The amendments also suggested that if digital platforms had significantly contributed to the Australian news industry, the companies could avoid the code entirely, at least for now."

While the news blackout--which also ended up taking down access to a wide range of sites, including some state health services pages, garnered international attention last week, Facebook's opposition to the measure has been clear for months.

That opposition, monopoly power expert Matt Stoller wrote Saturday, was driven at least in part by the proposal's threat to Facebook's data-driven business model. He wrote:

In other words, despite what Facebook's PR armies are saying, it isn't a link tax, it is an anti-monopoly law that Facebook is opposing because the law will undermine the firm's ability to monopolize the ad market and force transparency in how the firm gathers and manages its vast data horde. In some ways, it is an existential threat to the company (which I think might be hiding some things about its business model, considering its revenue is growing at 20-30% a year even though its user base in the U.S. and Europe where it makes most of its money is flat). [...]

The details of this law are interesting, but the real point of what Australia is doing is to that it is asserting the rule of law against a monopolist. In response, Facebook is saying, we are more powerful than your democratic officials.

Critics of the proposed code have also stressed it would fail in its purported effort to strengthen "a strong independent media."

Timothy Karr, senior director of strategy for Free Press Action Fund, wrote at Common Dreams this week that "in the background of this debate are major shifts in the economics of news production."

According to Karr:

The U.S. ad industry has moved away from buying placements in traditional media entities that produced news (like newspapers) toward cheaper, more finely targeted options offered by digital platforms that don't (like Facebook and Google).

Allowing the most powerful media conglomerates to negotiate payments from the most powerful tech conglomerates is an attempt to rebalance the equation. But giving handouts to News Corp. won't help the sorts of local, civic-minded news outlets and reporters who have suffered most under this new digital economy. And funding traditional news operations doesn't meet the needs of communities of color and working-class families, who've been long overlooked or misrepresented by U.S. media.

Harold Feld, senior vice president of Public Knowledge, expressed similar concerns last week.

"As we watch the continued developments in Australia, we worry that instead of the intended result of empowering users and promoting local journalism, the system will enrich tech and media moguls at the expense of civic discourse," Feld said in a statement. "Worse, it could make the internet more and more like cable TV, where media giants force users to sit through content blackouts to extort huge payments from cable companies."

In a statement on Tuesday, Australia's union for journalists welcomed Facebook's move to lift the news blackout but expressed concern the newly forged deals could still leave smaller publishers "out in the cold."

"For small publishers that have become reliant on Facebook to distribute their news, it will be a huge relief that the news tap has been turned back on," said Media, Entertainment & Arts Alliance (MEAA) federal president Marcus Strom. "But they will remain at the mercy of Facebook and Google, which are both seeking to avoid mandatory regulation and will instead choose which media companies they come to agreements with."

Strom added that it "shouldn't be up to Facebook and Google to cherry pick and groom publishers it deems acceptable for side deals. Any code should be mandatory, uniform, predictable, and fair; not at the whim of technology executives."