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

Facebook’s agreement with Australia gives it a way to avoid making necessary payments to publishers for news content, as long as the company strives to reach agreements with publishers on its own initiative.

“We appreciate that the government has created flexibility to continue negotiations with publishers, while giving us 30 days’ notice before the appointment,” said Campbell Brown, Facebook vice president of global news partnerships. If Facebook’s negotiations with Australian publishers fail to satisfy the government, the company could re-impose the news ban, rather than be forced to comply with the terms of the new law for setting payments.

“I hope this step will not be needed,” said Brown.

The compromise as planned would be an alternative to the voluntary payments that Facebook made to the news “partner” for its News Tab product for mobile users in the US and other countries.

The payments Facebook has made so far are not very expensive for the company, whose advertising activity led to a record revenue of $ 86 billion last year. News content accounts for only 4% of what people see in the main news feed, Facebook said when it announced it would remove the news from the Australian platform last week.

News editors rely on the audience that Facebook and Alphabet Inc.

Google delivers. In the hours following Facebook’s decision to stop sharing news in Australia, news publishers in the country saw that traffic from readers outside Australia fell by about 20%, data from the analysis firm Chartbeat showed.

About 36% of Americans receive their news on Facebook, according to a fall 2020 study by Pew Research, compared to 23% on YouTube Alphabet and 15% on Twitter..

If Facebook were to pay for news content globally, the cost would be significant, said Eric Ross, an analyst at Cascend Securities. “The margins disappear when you have to pay all of a sudden for things that were free,” he said.

The agreement between Facebook and Australian news providers comes as he and Google face antitrust lawsuits in the US and regulatory scrutiny elsewhere. Australia and other countries seeking payment for news content on behalf of publishers claim that Facebook is abusing its market power by trying to minimize or avoid such spending. A 2019 Australian report found that large platforms threatened social media companies, as well as advertisers and the news industry in general.

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

A US news editor said the Facebook dispute in Australia suggested that the social media company had renewed its interest in paying publishers after previously being reluctant to do so.

“We are at a peak,” said Maribel Perez Wadsworth, editor of USA Today, Gannett’s iconic headline. Co.

, the largest newspaper chain in the US “There is finally a much greater appreciation of the value of credible journalism.”

USA Today participates in the US news tab offer in the USA through a licensing agreement.

News Corp.,

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

Australia’s efforts could lead non-traditional media, such as freelance journalists who publish articles on writing platforms such as Medium, to demand payment, said Bernstein analyst Mark Shmulik. “The concern is, if we don’t draw a line to the media conglomerates? “This is a path that Facebook does not want to take down,” he said.

Earlier this month, Australian officials discussed with their counterparts in Canada, Germany, France and Finland those countries that adopt similar rules on technology platforms that pay news publishers, said Steven Guilbeault, Canada’s minister of cultural policy. that the coalition of countries could expand overtime.

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

“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 payments to the press has stifled – and sometimes expanded – in Europe for more than a decade. A new European Union copyright law passed in 2019 and the involvement of antitrust regulators have given the media a new package, inter alia, by creating a new copyright control for the media over the use of their publications on internet by technology companies, except for very short excerpts and hyperlinks.

In France, the only country to have implemented EU law so far, Google signed licensing agreements for its News Showcase product in November last year with several publications, including Le Monde. The agreements came after a French court reaffirmed an order from the country’s antitrust regulator through which Google must negotiate.

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

“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 their articles by publications on its platform constitutes a license under French law and remains unchanged. Currently, the company displays links, rather than rich previews, when users post news articles from French publications on their own, unless the publication has given explicit permission to Facebook.

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

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

—Sam Schechner and Paul Vieira contributed to this article.

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

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