Asia & Pacific

Facebook Wins a Battle with Aussies But May Lose the War in Long-Term, Observers Say

The Australian government has struck a deal with Facebook under which Canberra has agreed to make amendments to its landmark media bargaining legislation, while the tech firm will restore news to Australian pages in the next few days. But the question remains, who gains to gain the most from the pact?

On 23 February, Australian Treasurer Josh Frydenberg and Communications Minister Paul Fletcher announced that they reached a compromise with Facebook CEO Mark Zuckerberg over the Media Bargaining code, which will undergo certain changes while the tech giant, in its turn, will commit to make a “significant contribution” to local journalism.

Last week Facebook banned Australian users from viewing and sharing news links, inadvertently restricting access to government pages as well as health and emergency accounts. The move came as the Australian parliament was poised to pass a law obligating Big Tech companies to pay for news.

Facebook is Major Beneficiary of the Deal

“Facebook has made it clear that pressure works,” suggests Dr Binoy Kampmark, senior lecturer at RMIT University, Melbourne. “Blocking the option of sharing news on its platform by Australian users of both international and domestic sites, disadvantaging marginal groups and even restricting the spread of information from government websites, has confirmed its influence.”

​The Australian government will make four amendments to the law: first, before applying the legislation to the media company the authorities would look into whether a digital platform has made a significant contribution to the Australian news industry; second, a tech giant will be notified of the government’s intention to designate it a month before any final decision; third, “non-differentiation provisions will not be triggered because commercial agreements resulted in different remuneration amounts or commercial outcomes that arose in the course of usual business practices”; fourth, “final offer arbitration is a last resort where commercial deals cannot be reached by requiring mediation, in good faith, to occur prior to arbitration for no longer than two months.”

​At the same time, Facebook may prohibit Australians from accessing news on its platform again, should Canberra later move to apply the code to the tech firm, according to the company’s head of news partnerships, Campbell Brown.

Facebook stands to gain most from the deal, believes James O’Neill, an Australia-based barrister and geopolitical analyst.

“Australian government handled the whole deal badly from the start.” he notes. “The deal that has been reached will require Facebook to make some payments, but nowhere near what the Australian government hoped for.”

While the Australian authorities argue that the amendments will “strengthen the hand” of regional and small publishers in getting fair payment for the use of their content by the digital platforms, it appears that the legislation will create more imbalance in the news ecosystem, according to Dr Sue Greenwood who teaches journalism at the UK’s York St John University.

“[The law] could leave smaller or local news providers in a weaker position and put providers who may deliver content which gets more clicks and shares on Facebook – and therefore has a higher value to Facebook – in a stronger negotiating position,” she presumes.

Meanwhile, Australian major news publishers hailed the deal. Seven West Media, which owns the West Australian newspaper and the Seven TV network, has become the first media company to sign a letter of intent with Facebook. Nine Entertainment Co. Holdings that earlier concluded a deal with Alphabet’s Google, also welcomed the amendments.

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