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Facebook's wrong about a lot of things. Blocking news in Australia isn't one of them.

Published by Business Insider on Mon, 22 Feb 2021

<p><img src="https://static3.businessinsider.com/image/6033cc79bed5c50011a2bcbb-1778/AP19296514510747.jpg" border="0" alt="mark zuckerberg facebook" data-mce-source="Andrew Harnik/AP" data-mce-caption="Facebook CEO Mark Zuckerberg in Washington DC on Oct. 23, 2019."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>There are a lot of reasons not to like Facebook. There are <a href="https://www.businessinsider.com/facebook-5-billion-fine-new-rules-may-not-fix-privacy-2019-7">privacy concerns</a>, its history of <a href="https://www.businessinsider.com/cambridge-analytica-whistleblower-christopher-wylie-facebook-data-2019-10">leaking users' data</a>, or the fact that its <a href="https://www.businessinsider.com/facebook-political-group-recommendation-ban-long-term-2021-1">algorithm has played a huge role</a> in spreading misinformation and divisive content in the US.&nbsp;</p><p>If you live in Australia, there's another reason: Facebook surprised everyone last Wednesday when it <a href="https://www.businessinsider.com/facebook-bans-australian-users-from-sharing-news-stories-2021-2">blocked all sharing of links to news websites</a> in the country. That includes publishers sharing links to their own sites or users sharing links to those siteseven outside of Australia.</p><p>Why it did this is relatively simple: Australia is on the cusp of passing a law that will require Facebook and Google to pay news publishers for the links to their content shared across their platforms. That law is, as Casey Newton put it in his newsletter, Platformer, a complete <a href="https://www.platformer.news/p/facebook-calls-australias-bluff">"shakedown."</a></p><p>While Facebook's wrong about a lot of things, it isn't wrong about this. Facebook's move was the logical response to what could only generously be described as the worst attempt by a government to pander to an influential constituency at the expense of an unpopular target.&nbsp;</p><p>Thinking that Facebook should be forced to pay news organizations for links to their content that appear on Facebook because they put them there is the opposite of how the internet is supposed to workand that's true even if you don't care for Facebook at all.&nbsp;</p><p>Australia definitely has pretty good cards in its handit can pass laws, even bad ones. Facebook just believes it has better cards and is raising the stakes. In that sense, it's going all-in by getting out.&nbsp;</p><h2>Facebook is betting that publishers need Facebook more than the other way around.</h2><p>And the Australian parliament is betting with the publishers' money. If Facebook makes this block permanent, it's those publishers who will feel the most pain, not the government.</p><p>That said, I don't think Facebook wants to permanently block news content in Australia.</p><p>Facebook benefits from news articles shared on its platform. More content on Facebook is good for Facebookit encourages more engagement, which keeps people on Facebook longer, which means they see more ads.</p><p>The company just isn't willing to pay publishers for links to articles that they freely post on Facebook to generate traffic to their websites.&nbsp;</p><p>"The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content," the <a href="https://about.fb.com/news/2021/02/changes-to-sharing-and-viewing-news-on-facebook-in-australia/">company wrote in a blog post</a> published on Wednesday.&nbsp;</p><p>On this point, Facebook is right.&nbsp;</p><h2>The response has been swift and harsh.&nbsp;</h2><p>As it is with these types of things, people are largely measuring fault based on who's inconvenienced them the most.&nbsp;</p><p>At the moment, it's fair to say the most direct cause of that frustration, at least if you live or publish news in Australia, is Facebook. It was Facebook that decided to block sharing news.&nbsp;</p><p>"Facebook's actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing," Australia's Prime Minister Scott Morrison said <a href="https://www.facebook.com/scottmorrison4cook/posts/3992877800756593">in a statement</a> published on, of all places, Facebook.</p><p>The move was characterized as "a classic example of a monopoly power being the schoolyard bully, trying to protect its dominant position with scant regard for the citizens and customers it supposedly serves," <a href="https://www.reuters.com/article/australia-media-facebook-idINKBN2AI050">according to Henry Faure Walker</a>, chairman of Britain's News Media Association.</p><p>It didn't help that Facebook's automated process for blocking link sharing also affected government and public health sources as wellsomething that Facebook says it will correct as it's made aware of problems.&nbsp;</p><p>That's sort of par for the course with Facebookthe company made an extremely smart business decision but completely botched the PR.&nbsp;</p><p>Insider's Tyler Sonnemaker<a href="https://www.businessinsider.com/explainer-australias-war-with-facebook-and-google-over-news-content-2021-2"> wrote Wednesday that</a> "News publishers have long had a bone to pick with companies like Facebook and Google, blaming them for eating away at ad revenues (and as a result, journalism jobs), while also exercising massive control over publishers through algorithms and benefitting from showing their users news content without paying its creators."</p><h2>Except publishers extract extraordinary value from the two tech giants, though for different reasons.</h2><p>In the case of Facebook, the social media giant isn't "showing [its] users news content without paying its creators." Those creators are literally copying the URL of their articles and posting it on Facebook to generate traffic, and then asking to get paid for those links appearing on Facebook. Paying for hyperlinks is the antithesis of the open internet, but they've now gone to the government to force the issue.&nbsp;</p><p>Facebook can survive financially in Australia without links to news content. There's a question of whether it can survive the PR battle, but in terms of the loss in engagement, Facebook's blog post said that journalism posts make up less than 4% of the content people view in the News Feed.&nbsp;</p><p>I suspect it's not too worriedpeople already say they hate Facebook, and yet <a href="https://investor.fb.com/investor-news/press-release-details/2021/Facebook-Reports-Fourth-Quarter-and-Full-Year-2020-Results/default.aspx">close to 3 billion</a> of them use it every month anyway.&nbsp;</p><p>That isn't true for Google.&nbsp;</p><h2>If Google were to no longer offer news content in search results, the quality and usefulness of its product dramatically decreases.</h2><p>If I'm searching for information about the Canberra wildfires, I'm going to expect to see news articles on that subject. If I don't, I'll likely go elsewhere. That's literally the worst-case scenario for Google.&nbsp;</p><p>And so despite the fact that its search engine is one of the primary sources of traffic for many publishers, Google entered into deals with the largest of those publishers in Australia.</p><p>Google is much more diplomatic about it, but the way you know that the entire law is a shakedown is that Google didn't pay anything for the links in its search enginewhich is purportedly what the law is supposed to accomplish. Instead, it offered up payments to include the publishers in its "News Showcase."&nbsp;</p><p>"Today's agreement with News Corp covers a wide range of our products such as News Showcase, YouTube, Web Stories, Audio and our ad technology," Don Harrison, Google's president of global partnerships, said in an emailed statement to Insider. "News Showcase now has partnerships with over 500 publications around the world, demonstrating the value this product can bring to our news partners and readers everywhere. We hope to announce even more partnerships soon."&nbsp;</p><p>It's almost as if Google recognized that the best course of action was to pay the publishers to leave it alone, while trying to avoid setting a dangerous precedent in other countries. We'll see if the former accomplished the latter, though I doubt it. Still, by entering into the deals, it at least avoids being dragged into arbitration.&nbsp;</p><h2>Facebook and Google dominate the digital advertising market in ways that are problematic for other reasons, but that isn't what's wrong with publishing.&nbsp;</h2><p>The problem is that the internet allowed publishers to make their content available to an almost infinite audience at no incremental costwhich they happily did. The loss in subscription revenue would be more than offset by fact that they could sell ads to a far larger audience.</p><p>Facebook and Google's advantage is that they have the scale and technical capabilities to make digital advertising far more effective, while also making it more efficient.</p><p>For that matter, most publishers are using tracking and ad tech from those two companies.&nbsp;The Australian, which is owned by News Corp and is one of the sites involved in the deal made with Google, uses trackers from Facebook, Google, and Doubleclick, which is owned by Google.&nbsp;</p><p>Journalism is struggling in Australia (like everywhere) because it hasn't figured out how to adapt to the shift in how people use the internet and consume content.&nbsp;</p><p>There's one other point worth making, and it relates to the less-talked-about part of the law. That's the part that would require the tech companies to disclose to news websites any changes to their algorithms 14 days in advance.&nbsp;</p><p>Never mind that Google makes changes to its algorithm on an almost daily basis, and there's an entire industry based on trying to figuring out (and, in many cases, game) what it's doing.&nbsp;</p><p>There's almost no scenario that either company is going to be willing to do this.</p><p>The fact that News Corp and the other major publishers were willing to take Google's money and ignore that altogether shows that the entire thing was always about money.&nbsp;</p><p>Now, Australian publishers can't even take advantage of one of the most effective tools available for building an audience, sharing content, and driving traffic to their website, all because it wasn't enough that you could do all of those things for free.</p><p>Facebook estimates that the traffic it sent to Australian publishers was worth AU$407 million last year. That's a lot more than zero, which is what it's sending now.</p><p>"Be careful what you wish for" seems to not even begin to describe the cautionary tale here.</p><p><a href="https://www.businessinsider.com/facebook-not-wrong-block-news-australia-google-law-2021-2#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/warren-buffett-modest-home-bought-31500-looks-2017-6">Warren Buffett lives in a modest house that's worth .001% of his total wealth</a></p>
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