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Facebook Escalates, Google Backs Down in Australian News Feud

Michael Behr

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Google

With governments around the world re-evaluating their relationship to the big techs, the contrasting reactions from Google and Facebook to Australia’s proposed news laws provide a fascinating testing ground.

Australia’s ongoing feud with Facebook and Google over news payments has heated up as Google strikes payment deals while Facebook says it will block Australian news sources.

The moves are in reaction to Australia’s proposed News Media Bargaining Code, which could require tech giants like Facebook and Google to pay Australian companies for news content.

Both Facebook and Google have objected to the proposal, with Facebook threatening to block news content in Australia over the proposed law.

Google previously escalated the conflict by threatening to withdraw its search engine service from Australia, though other services like Gmail and YouTube would still be available. There were reports that Google was preventing Australian news websites appearing in its searches as part of a test to determine the value of its service to Australian news outlets.

However, last week an Australian Senate committee recommended that the bill pass through Parliament and become law. The government has also said that the law will see the tech giants pay publishers in a lump sum, rather than by click.

With the code on track to become law, Google has been striking deals with Australian news publishers. The latest is with News Corp., the multinational news giant owned by billionaire Rupert Murdoch.

Google signed a deal with Australia’s Nine Entertainment, a major Australian media company and publisher of the Sydney Morning Herald, estimated to be worth around $23-million (£16.6-million). The company has been one of the biggest lobbyists in favour of the law.

Google also signed a similar deal with Australia’s largest diversified media company Seven West, reported to be worth a similar amount to the Nine Entertainment deal.

However, Facebook has taken the opposite approach and has decided to prevent Australian users from sharing or viewing news content on its platform.

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” the company said in a blog post.

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The new policy means that Australian users will be unable to read or share news content on Facebook. Australian news publishers will be prevented from sharing or posting any content on Facebook pages. Some users have claimed that the ban has already taken effect.

Should the code become law, Google and Facebook will have 90 days with qualifying Australian media companies. Facebook had previously called for a six months’ grace period to negotiate deals with news companies directly before mandatory regulations apply.

The deals are being made through a $1-billion Google initiative, Google News Showcase. This will see Google pay outlets that sign up for its Google News apps in exchange for curated lists of news. Having launched in Australia in February, the showcase is also live in the UK, France, Germany, and Brazil.

Seven Australian publications originally signed up to the showcase, earning between US$150,000 and US$1.5 million.

However, it is unclear if these deals include Google’s search function or not.

Australian Treasurer Josh Frydenberg has said that state-owned Australian Broadcasting Corp. is also negotiating with Google.

“There are negotiations going on with all the major players and the minor players at the moment,” Frydenberg said. “This will help sustain public interest journalism in this country for years to come.”

The latest move signals a potential resolution to an ongoing dispute between Australia and tech giants Google and Facebook.

Facebook chief Mark Zuckerberg recently discussed the issue with Australian Treasurer Josh Frydenberg and Communications Minister Paul Fletcher, although it was reported he had failed to convince them to halt the motion.

Google parent company Alphabet’s head Sundar Pichai also met with Australian ministers to discuss the move recently.

With Australian Prime Minister Scott Morrison having spoken with Microsoft, the company behind rival search engine Bing, Google could have found itself ceding territory to its rival.

The Australia-Google-Facebook feud has been in the spotlight as other groups, such as the US and EU, re-evaluate their relationship with the tech giants. Australia provided a testbed to gauge an appetite for conflict, the consequences of neither side backing down, and a potential model for a new relationship.

Australia’s position as a testing ground for a new relationship with big tech companies has taken an interesting turn, as one company moves to follow the new rules, while another defies them.

With Google acquiescing to Australian demands, other countries may now be emboldened to enact similar legislation. Reports have suggested that both members of the European Parliament and a Canadian Minister have considered similar laws to Australia’s code.

However, Facebook’s restrictions on users have been criticised as undemocratic, this may drive governments to seek greater powers over the company.

Michael Behr

Senior Staff Writer

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