This week, Facebook blocked news articles on its apps for all Australian users and blocked Australian news articles for users worldwide. It’s a drastic step, but it’s probably the least bad option the company has left. The Australian government has forced him to adopt this position, with an attempted Big Tech reshuffle making things worse for Australians.
Last year, the government proposed a mandatory trading code to address alleged “power imbalances” between Australian media groups and tech companies. The government’s position was that by simply allowing users to link to news articles, Facebook and Google (the only tech companies identified so far) were exploiting their market power and profiting from the content of websites. ‘news. To resolve this issue, the two parties would be required to reach an agreement on payment and send it to binding arbitration that could favor news publishers if they could not. The rules would also require companies to notify in advance of any changes to their algorithms.
The proposed measures have little justification from the point of view of consumers. The argument for the algorithm notice was that the changes can be disruptive and unfair to publishers who get less traffic as a result. But algorithmic changes are made to improve results for users, and if one publisher suffers, another benefits.
In 2013, Facebook was rendered nearly unusable by a site called Upworthy, with titles such as “This incredible child was able to enjoy 19 wonderful years on this planet. What he left behind is wonderful” that persuaded users to like and click, but were devoid of any real content. Algorithm changes fixed things and prevented Upworthy from dominating user feeds with such uninteresting content. If these changes had been leaked to these sites, making it easier for them to play with the system, you won’t believe what would have happened next.
With regard to paying for links, again, the Australian government’s rationale is flawed. While it is undeniable that the revenues of many large news publishers have suffered from the rise of the Internet, they and technology platforms mutually benefit from the web links shared between them. Search engines and social media websites send traffic to news sites and benefit themselves from the fact that users can find the type of content they need. Most websites want to be linked to.
It is not credible to suggest that the absence of payment in either direction is evidence of anti-competitive market power. It’s a long-standing principle on the Internet that links are free. There is no example anywhere of a search engine or social media site paying for third-party websites to access them – Scott Farquhar, co-founder of Australian tech giant Atlassian, said called the idea a “fundamental threat to openness”. Internet, not just Google”.
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This debunks the accusation that the lack of payment to news sites is due to Facebook and Google exploiting inordinate market power: smaller platforms with less influence in the market like Twitter and DuckDuckGo do not pay publishers for links, nor does Facebook pay for links posted by users to the sites of giant companies such as Amazon. Non-payment is not evidence of a market power imbalance that governments need to address.
[see also: Revealed: The army of Big Tech lobbyists targeting Capitol Hill]
You don’t have to like Facebook to recognize that charging it for links to other specific websites isn’t about restoring competition to the marketplace. The purpose of the news code appears to be to give money to politically influential media companies. Google agreed, signing payment agreements with a number of media companies. This includes News Corp, which has waged war on Big Tech on the pages of its newspapers in Australia and further afield, including Britain. Now that Google has agreed to pay those critics, Australian Treasurer Josh Frydenberg has suggested the code may not apply to the search engine giant after all.
Facebook, however, chose to opt out of the Australian news links, opting out of the whole process. For this he was convicted. Frydenberg called the move “wrong” and “unnecessary.” David Cicilline, US Congressmanan influential Democrat, responded to the news by tweeting that “Facebook is not compatible with democracy”, and his actions amount to “bringing an entire country to its knees” – all because he chose not to not accept a punitive link tax. .
There is little justification for this hyperbole. Facebook is not an essential tool for Australians to access the news: more Australians use television and other sources of news online than through social media, and anyone with access to Facebook can also visit news websites directly through a browser.
Nor is the rise of Facebook the direct cause of the news industry’s relative downfall. Much of the decline in media revenue, especially local news, comes from moving online classifieds to sites such as Rightmove and Gumtree. As analyst Benedict Evans notes: “Perhaps two-thirds to three-quarters of the money spent on Google and Facebook is money that has never been spent on traditional advertising – it comes from SMEs and local businesses that could have spent the most on classified ads, but probably wouldn’t have even done that.
The Internet has introduced competition to advertising markets that were previously dominated by a few large news outlets that acted as bottlenecks between advertisers and consumers. Now anyone with a blog or YouTube channel can run ads themselves. But although traditional news publishers have lost their market power, they have retained their political clout, and their cries of being “hurt” by the tech giants tend to be heeded by governments.
Recognizing this doesn’t mean we should be optimistic about the decline of parts of the news media. But Australia’s approach has used these concerns as a fig leaf for crony capitalism. It ended in a messy way. The rest of the world can learn from this debacle – and do better.
[see also: What the term “Big Tech” tells us about the future of Silicon Valley titans]