Facebook’s conflict with Australia over the news is just the beginning

Facebook’s deal with Australia allows it to avoid mandatory payments to publishers for news content, as long as the company works to reach agreements with publishers on its own.

“We are grateful that the government has created flexibility to move forward with bidding with publishers, even though it notifies us 30 days before the appointment,” said Campbell Brown, Facebook’s vice president of global news. If Facebook’s negotiations with Australian publishers fail to satisfy the government, the company could re-impose its news ban instead of being forced to comply with the terms of the new law to establish payments.

“I hope this step is not necessary,” Ms. Brown.

The commitment as anticipated would be an alternative to the voluntary payments Facebook has made to the “partner” media for its News Tab product for mobile users in the U.S. and other countries.

The payments Facebook has made so far are not overly costly for the company, whose advertising business reached a record $ 86 billion in revenue last year. News content only accounts for 4% of what people see on their main news feed, Facebook said when it announced it would remove news from the platform in Australia last week.

News editors trust the public that Facebook and Alphabet Inc

Google Delivery. In the hours following Facebook’s decision to shut down news sharing in Australia, the country’s news publishers saw reader traffic outside Australia decline by around 20%, the data showed of the analysis firm Chartbeat.

About 36% of Americans receive their news from Facebook, according to a Pew Research study in the fall of 2020, compared to 23% who receive it from Alphabet YouTube and 15% from Twitter.

If Facebook were to pay for news content globally, the cost would be significant, said Eric Ross, an analyst at Cascend Securities. “Margins go away when you suddenly have to pay for things that were free,” he said.

The clash between Facebook and Australian news providers occurs as Google and them face antitrust lawsuits in the United States and regulatory scrutiny elsewhere. Australia and other countries seeking payment for news content on behalf of publishers argue that Facebook is abusing its market power in an attempt to minimize or avoid such expenses. A 2019 Australian report found that large platforms threatened social media companies and advertisers and the news industry in general.

Both Facebook and Google say their platforms help journalism. As Facebook itself has pointed out, publishers around the world are already trying to maximize the attention their work receives on social media without any promise of compensation.

An American news editor said Facebook’s dispute in Australia suggested the social media company had renewed interest in paying publishers after being reluctant to do so.

“We’re at a turning point,” said Maribel Perez Wadsworth, editor of USA Today, Gannett’s flagship title Co.

, the largest newspaper chain in the United States “Finally, the value of credible journalism is much more valued.”

USA Today participates in the Facebook news tab it offers to the US through a license agreement.

News Corp.,

owner of The Wall Street Journal, has a business deal to provide news via Facebook. Last week the company reached a three-year agreement with Google to license content from its release and produce new products for Google platforms.

Australia’s efforts could boost non-traditional media, such as independent journalists who publish articles on writing platforms like Medium, to demand payments, said Mark Shmulik, an analyst at Bernstein. “The concern is, what if we no longer draw a line in the media conglomerates? … This is a path that Facebook doesn’t want to go down, ”he said.

Earlier this month, Australian officials spoke with their counterparts in Canada, Germany, France and Finland about those countries that adopt similar rules on technology platforms that pay news publishers, said Steven Guilbeault, Canadian minister responsible for cultural policy. , and added that the coalition of countries could expand over time.

Guilbeault said he is encouraged by developments in Australia and intends to introduce measures this spring that have the support of his global allies and relevant stakeholders. On Monday, Canadian Prime Minister Justin Trudeau spoke with his Australian counterpart Scott Morrison about possible cooperation to pursue regulation of online platforms, according to a summary of the conversation published by Mr. Trudeau’s office. Trudeau.

“We need to find a solution that is sustainable for news publishers, small and large digital platforms, and for the health of our democracy,” Guilbeault said.

The battle for media payments has been on fire and has sometimes intensified in Europe for more than a decade. A new European Union copyright law passed in 2019 and the involvement of antitrust regulators have given a new impetus to the media, among other things, by creating a new copyright control for the media on the use of their publications on the Internet by technology companies, except in the case of extracts and very short hyperlinks.

In France, the only country to date to implement EU law, Google signed licensing agreements for its News Showcase product last November with several publications, including Le Monde. The deals came after a French court reaffirmed an order from the country’s antitrust regulator that Google had to negotiate.

Google said it has signed News Showcase agreements with more than 500 publications in a dozen countries, including Germany, the United Kingdom and Australia. Google, last October, pledged $ 1 billion in three years to these licensing agreements, but declined to say on Tuesday how much that amount has been invested.

“We have hundreds of partnerships with news publishers large and small, making us one of the largest funders of journalism,” a Google spokeswoman said.

Facebook said that the publication of its articles on its platform by the publications constitutes a license in accordance with French law and remains unchanged. Currently, the company only shows links, rather than previews, when users post news articles from French posts, unless the post has given explicit permission to Facebook.

A Facebook spokesman said the company is holding talks in France and Germany to launch its Facebook News product, which pays to license media articles. The product was launched last month in the UK with articles from publications such as The Guardian.

Facebook has previously said it provided hundreds of millions of dollars to posts through its various tools for advertising and subscriptions.

—Sam Schechner and Paul Vieira contributed to this article.

Write to Jeff Horwitz to [email protected] and Sarah E. Needleman to [email protected]

Corrections and amplifications
Facebook generated record revenue of $ 86 billion last year. An earlier version of this article incorrectly said that Facebook generated $ 70.7 billion in revenue. (Corrected on February 23)