AUSTRALIA, GOOGLE AND FACEBOOK’S GAME OF CHICKEN

Humberto Juarez is a postgraduate student at Wolfson College.

While Australia is essentially experiencing pre-pandemic life, the country is close to enacting legislation that could become a new reality for tech platforms in their relationship with media and journalism – and potentially a model for other countries to follow. 

Australia’s parliament is inching closer toward passing the News Media Bargaining Code, possibly even this week, prompting a real time game of chicken where the public saw different outcomes by Google and Facebook.

The proposed legislation would force platforms, notably Google and Facebook, to make commercial deals with publishers for displaying their content on their respective platforms or face binding arbitration if both parties cannot agree on a fair price. This follows a 2018 inquiry by Australia’s market regulator  into how tech platforms have affected media in the competition for advertising and revenues. 

In response, Google threatened to shut down its search feature but reversed course at the last minute. Facebook, on the other hand, walked away from the bargaining table by banning all Australian news content on its feed last Thursday. And while its execution was botched — emergency-service pages and government departments’ social media pages were blocked — this showed two vastly different reactions to regulation aimed squarely at what is increasingly being labeled an oligopoly by large American tech firms. 

These platforms’ impact and the larger digital transformation on journalism and media has been indelible. Revenue streams upon which old media business models relied on, print advertising, continues to dry up. Where media was once king in raking in money from classified ads and job postings, tech platforms have now co-opted. With considerable sway, these platforms can act as a sort of final editor as publishers strategize to “pivot to video” or push content in a prepackaged form that is best suited to search engines and algorithms.

Australia’s code is meant to even the playing field and support quality journalism and while this is certainly a means to go about doing that, the end is not exactly specified nor guaranteed. 

For one, tech platforms are incentivized to negotiate with the larger, traditional players in the media landscape. Google recently finalized a deal with Rupert Murdoch and his News Corp. empire that spans from the Wall Street Journal to the New York Post to include them in its Google News Showcase. While these behemoths of media can usually weather these types of changes, smaller enterprises are much more vulnerable. 

Last September, smaller lifestyle publications – many of whom have gone digital-only – from Junkee Media, Broadsheet Media and others wrote to the Australian Competition and Consumer Commission arguing that the new regulation would “accidentally destroy media diversity”. According to The Guardian, Google and Junkee Media reached a deal last week only further demonstrating how tied these types of outlets have become to tech platforms. 

Additionally, there is little guidance or recommendations as to how publishers should invest any earnings from these brokered deals. While the regulation purportedly supports Australian public interest journalism, there is nothing that designates how this is to be carried out. For the larger media companies this might mean buying back shares or rewarding stakeholders as opposed to building more investigative teams and strengthening newsrooms. At least one Australian senator, Sarah Hanson-Young, has said she would propose an amendment to make sure these revenues were allocated towards newsgathering. 

Facebook’s nearly weeklong ban on Australian news content poses many questions. According to the Reuters Institute, 52 percent of Australians use social media as their main source of news. The social network’s head of public policy in the land down under is not afraid to push back stating that news articles only make up four percent of what the average user sees on their feed and thus implying that the company’s bottom line is not that exposed. Banning reputable and credible news sources, however, will only foster more disinformation on the site as verified and factual content is deliberately excluded. 

The Verge’s Casey Newton (and the satirical paper The Betoota Advocate) opined that perhaps now is the time where Australians might even go to the news sources directly or even subscribe to their local papers. The outlook is not great: only 30 percent of Australian news consumers accessed news directly from the publishers’ websites according to the University of Canberra. 

On February 23, Facebook reached a deal with the Australian government after further negotiations. Arbitration would be seen as a “last resort” and Facebook will reserve the right to impose another news content shutdown. It will be interesting to note if news outlets see an uptick in subscribers with this option still available. 

Other countries are keeping an eye on the situation. Politicians and publishers in the UK, the European Union and Canada are considering similar reforms. Google has already cut out deals with French publishers last month in a sort of conciliatory, if not preemptive, measure but as different governments mull over regulation fighting on a variety of legal and business fronts could be an extensive affair. 

The situation is still dire for journalism; the media industry has been hammered by declining revenues in the past decade and the pandemic has only exacerbated the situation. Despite Australia’s well-meaning attempts at reform, journalism’s bottom line and mission could remain in a complicated spot. How this situation plays out could provide an example of how governments can try to rein in tech platforms to help journalism though only if that end goal ultimately materializes.

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