Facebook Blocks Oz. But Why Shouldn’t Platforms Pay for News?

This week, Facebook made good on its threat to block Australian news media on its platform. “Australian users cannot share Australian or international news. International users outside Australia also cannot share Australian news,” MSN reports. The move by the social giant is a hardline tactic designed to make the Australian government blink on proposed legislation that requires both Facebook and Google to pay for Australian news media that are shared across the platforms. Google reportedly has entered into agreements in recent days. For an in-depth analysis, especially from a global trade perspective, see Hugh Stephens’s post.

But acknowledging that the details are somewhere between opaque and invisible in the Facebook v. Oz story, I fail to see why the principle itself is terrribly flawed. Why shouldn’t the major online platforms pay for news media?

Google and Facebook (and potentially other platforms) derive substantial value from all those news stories that are shared across their platforms, but which others produce—often at great cost. Nevertheless, Facebook asserts that it does not need the news media as badly as the news media needs its platform. Perhaps that’s true. But in a statement released this week about the blocking decision, Facebook stated, “This is not our first choice – it is our last. 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.”

Combine that remark with the familiar generalization that the Australian proposal “misunderstands the internet,” and we are left to wonder if those are Facebook’s best arguments against the proposal. Because if the platform giants have ever been the least bit concerned with the “long-term vibrancy” of the news or any other media producing sectors, they must have been tripping balls when they built their business models. The underlying principle of every major online provider since roughly 2000 has been to monetize the flow of content produced by parties other than the platforms themselves.

Whether it’s someone making a joke or sharing a news story from the Washington Post, it’s all just data flow to Facebook. Very valuable data flow. And while we ordinary users may have volunteered to share personal comments or photos on the platform, the journalists whose salaries depend primarily on advertising revenues, did not voluntarily enter into the arrangement. While I recognize that the devil is in the details as to where the money will end up (i.e. does it pay journalists?), the underlying principle still seems sound.

Is really such a radical proposal that Facebook and Google (and potentially others if they achieve certain scale) pay negotiated fees to news producers? Certainly, the existing model has not done journalism much good, so why must we conclude that more of the same is necessary for the “long-term vibrancy” of the industry, as Facebook puts it? I noticed that Techdirt’s Mike Masnick tweeted his endorsement of Facebook’s rebuke to Australia, opining that the proposed legislation is just corporate welfare for Rupert Murdoch.

Admittedly, I find it difficult to defend journalism so broadly that it encompasses the work product of the Murdoch empire, but Masnick’s response is not wholly satisfactory to the question. What Facebook in particular has done to news—including where it has siphoned off revenue streams—has largely exacerbated the plague of alternate realities now threatening to unravel democratic societies worldwide. More specifically, to the extent that Masnick’s comment represents Facebook’s view, it obscures a much bigger truth:  that the major platforms have long been subsidized by the creators of works in nearly every field. That’s corporate welfare.

If the quotes listed on Yahoo! Finance, or the comments in this BBC piece are any indication, Facebook’s decision is not earning the company any goodwill—particularly in the middle of a global pandemic and brushfire season in Australia. And that’s on top of the fact that Zuckerberg & Co. have so reliably equivocated in its responding to demands to remove toxic disinformation and propaganda. “Well, that’s a tantrum. Facebook has exponentially increased the opportunity for misinformation, dangerous radicalism and conspiracy theories to abound on its platform,” said Lisa Davies, Editor of the Sydney Morning Herald, in response to the Facebook block.

Assuming the Australian proposal is a first test, it will be one to watch. There should be little doubt that if the platforms have to start paying for news in Australia and then the EU, we will see proposals to do likewise in the U.S. And that probably scares the hell out of Facebook and, perhaps Google as well. Presumably, Facebook will argue that the portal they built is so essential that they should not have to pay for any of the content that flows through it. But that seems about as irrational as saying that journalism itself is so important it should be free. Besides, I seem to remember a saying about great power coming with something. What was it again?

© 2021, David Newhoff. All rights reserved.

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