Around the globe, local media outlets are struggling to make ends meet as the internet, social media and paid advertisements tip the scales of media access in the favor of tech giants and publishing powerhouses. A recent showdown between tech giant Facebook and the Australian Government foreshadowed the grim potential of this journalistic power imbalance, but also revealed a glimmer of hope for local and low-budget news outlets.
Earlier this year, Facebook took the unprecedented step of banning Australian news when the country’s government pushed ahead with a proposed law which the social media giant had vocally opposed. Although the ban was reversed shortly thereafter, this resolution essentially required the Australian government to modify its proposed law into a form agreed upon by Facebook.
The ban and its law-making consequences raise serious concerns about power imbalances in several key areas, including between large individual companies and the government, as well as between profitable media conglomerates and lower-budget public-interest focused news outlets. Critics contend that Facebook engaged in dangerous nationwide media suppression with considerable ease and few consequences.
But with modern-day problems come modern-day solutions, which may be found in the country’s News Media Bargaining Code.
The News Media Bargaining Code Before the Australian news ban
In an increasingly globalized world where tremendous swaths of the population access their news online, local Australian news media has long struggled to compete with comparatively powerful global technology giants. To address this imbalance, the Australian government floated ideas for legislative change which would see local media outlets earn money for generating original news content on platforms such as Facebook.
It was this set of initiatives that would ultimately lead to Facebook’s Australian news ban.
For the three years preceding the ban, Facebook had been engaging with the Australian government to work toward rules to “encourage innovation and collaboration between digital platforms and news [organizations].” The company stated that it had “made clear to the Australian government for many months, the value exchange between Facebook and publishers runs in favor of the publishers,” giving the example that in 2020, “Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.”
Given that Facebook and the Australian government did not agree on what such rules should be, the Australian government pushed ahead with proposed legislation, the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2021 (News Media Bargaining Code).
The News Media Bargaining Code was first introduced in the House of Representatives on December 9, 2020. It is a bill to amend the Competition and Consumer Act 2010 to require Facebook and Google to negotiate with news media companies and reach content sharing commercial deals or face mandatory arbitration and mediation. In short, it requires certain large technology companies to share revenue with Australian news outlets.
Facebook took issue with this iteration of the News Media Bargaining Code on account of how it “sets a precedent where the government decides who enters into these news content agreements, and ultimately, how much the party that already receives value from the free service gets paid,” which “fundamentally fails to understand how [its] services work.”
The tech giant concluded: “In response to Australia’s proposed new Media Bargaining law, [the company] will restrict publishers and people in Australia from sharing or viewing Australian and international news content.”
For Australian publishers, this meant that they were barred from sharing and posting content on their Facebook pages. For Australian Facebook users, this meant that news content from Australia and international locations was unavailable. As part of the news content ban, certain emergency services, helplines and charities also ended up temporarily barred from sharing content on Facebook.
Implications for democracy
Seemingly in an effort to restore Australians’ access to news content on Facebook, despite the country’s Prime Minister Scott Morrison commenting that the government “will not be intimidated by BigTech seeking to pressure our Parliament as it votes on our important News Media Bargaining Code,” the Australian government engaged in further consultation with Facebook and agreed to change the bill.
Facebook stated that it is “satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them.”
Taken at face value, Facebook’s statement holds little long-term significance. However, taken in the context of the country’s constitutional arrangement, it raises serious concerns.
Australia is a representative democracy. Every three years, its citizens elect 151 Members of Parliament (MPs) to the House of Representatives. These MPs are responsible for introducing, debating and voting on proposed legislative changes on behalf of their constituents.
Facebook, on the other hand, is an individual company. While not a constituent in the ordinary sense of the word, it is affected by decisions of the Australian legislature and like any individual, can comment on proposed legislative change. The issue is not that Facebook has an opinion about legislative matters bur rather how far Facebook went in expressing that opinion. When engaging with the Australian government on the proposed law, it used access to nationwide news content as a bargaining chip to essentially force the legislature’s hand.
Beyond its legislative influence, Facebook’s move undermined individuals’ right to democracy. A central pillar of democracy is the right to information. Article 19(2) of the International Covenant on Civil and Political Rights (the Convention) states that “[e]veryone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice.” Australia ratified the Convention in 1980.
Given the Convention, individuals have a right should they wish to exercise it to be informed of what is happening on a domestic and international level. They can use this information to make fully informed decisions in day-to-day life and live as an informed citizen. For 11 out 25 million Australians, Facebook is their main source of news. Therefore, when Facebook barred Australians from accessing news through its platform, almost half of the country was left in an information deficit, with their right to information compromised.
Whether large technology companies should have the power to affect freedom of information for such a proportion of the population has been weighed in on by widespread commentators. As Morrison noted in a Facebook post, Facebook’s “actions will only confirm the concerns that an increasing number of countries are expressing about the [behavior] of BigTech companies who think they are bigger than governments and that the rules should not apply to them. They may be changing the world, but that doesn’t mean they run it.”
Similarly, Dr. Andrea Coscelli, head of the United Kingdom’s Competition and Markets Authority, told the BBC that the power imbalance between individual companies and democratic sovereign nations is a “worrisome development” that illustrates an urgent need to take action to reduce the power imbalance.
The News Media Bargaining Code, in a form modified to meet Facebook’s demands, has since become law; the House of Representatives and the Senate passed it on February 25, and that it received Assent on March 2.
Power imbalance between large technology companies and local media
Although the News Media Bargaining Code “reasonably attempts to address” the power imbalance between technology giants such as Facebook and local news media outlets, the process of getting to its enactment served as an unequivocal illustration of how far tipped that power imbalance currently is.
Many smaller local news outlets provide a public service with respect to the public’s right to access accurate information. Though most of these operations have gone online in recent decades, many casual news readers glean the latest developments by scrolling through social media rather than by navigating to news sites. As Forbes reported in June 2020, “consumers continue to shift away from traditional media sources for their news and are moving more towards social media and messaging services to find the news.” Given this trend in consumer behavior, public interest media publishers depend on platforms like Facebook to share their stories, and therefore, share the news.
Expectations for the future
The precedent that Facebook’s move sets is concerning. How far large companies will go in using their power over information to push the envelope of law-making is yet to be seen, but may open the floodgates to similar actions in the future. Threats thereof have already come to light; Google made a threat similar to Facebook’s, claiming it would withdraw its search engine from Australia in response to the News Media Bargaining Code. Unlike Facebook, Google refrained from following through.
What is known for certain is local media across the globe continue to struggle for survival when faced with competition from hyper-resourced national and global tech and publishing powerhouses. Consumers who would once have paid for a physical copy of their local paper now expect free digital access to the news, with internet access alone being called a “universal right.”
Addressing the immediate concern of local news media being compensated for their content can be achieved with services such as Facebook News, which pays participating publishers. Facebook claimed it was ready to launch this in Australia but will only do so “with the right rules in place.”
Such a concern can also be addressed with legislative reform and regulatory intervention to the effect of the News Media Bargaining Code. While not a panacea, given that the News Media Bargaining Code represents reining in large technology companies’ hoarding of power, global news publishers have heaped praise onto it.
For Morrison, the News Media Bargaining Code is merely the beginning of greater international efforts to tighten their control over technology giants. Morrison stated that other countries have extended their support to Australia’s efforts and he expects other Western jurisdictions to follow suit. Depending on the effectiveness of the Media Bargaining Code at achieving its purpose of “ensuring Australian journalists and news [organizations] are fairly compensated for the original content they produce,” which the country’s government will review within the year, Morrison’s prediction is quite possible.
Disclosure: Facebook has in the past donated funds to JURIST on a non-conditional basis.