Home Australia Facebook thinks it won the battle of the media bargaining code — but so does the government

Facebook thinks it won the battle of the media bargaining code — but so does the government

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With the dust settling on the news media bargaining code battle royale, both Facebook and the Australian government have declared victory.

The legislation passed the Senate on Tuesday night, meaning the government can now make Facebook and Google negotiate with news producers to pay for content that appears on search engines or social media.

It’s seemingly the end of a series of threats and standoffs that culminated in 11th-hour negotiations between Facebook boss Mark Zuckerberg and Treasurer Josh Frydenberg this week, after the social media giant banned Australian news on its platform.

The government got its bargaining code, news businesses will get their cheque, and Facebook gets a few key concessions.

So who won and who lost?

Did Facebook or the government blink first?

What concessions did Facebook win?

Facebook had been dead against the proposed code for months, threatening to block links to news articles over a code it said was unworkable.

But this week (after banning news), the company had a change of heart.

It decided the code was, in fact, workable — at least with a few amendments.

In a series of calls between Mr Zuckerberg and Mr Frydenberg, the social media behemoth negotiated small but important changes that mean there’s a good chance the code may never be used at all, said Tama Leaver, a professor of internet studies at Curtin University.

Among them was the provision that before a digital platform is made subject to the code, the Treasurer must first take into account whether it has reached commercial agreements with news media businesses.

“The code will sit in the Treasurer’s desk and he can pull the trigger whenever a platform is big enough to squeeze for money,” Professor Leaver said.

The Treasurer hasn’t said how many deals Facebook and Google must strike with news producers to avoid the code, but it appears that Google is getting close, Professor Leaver said.

Google has already struck deals with News Corp, Nine Fairfax, Seven West Media, The Guardian and news company ACM.

The company is also expected to reach agreements with SBS and the ABC.

“The Treasurer appears happy with what Google has done by striking deals with the major players,” Professor Leaver said.

And if the Treasurer ever decided to “pull the trigger”, Facebook could simply ban Australian news again.

Another last-minute concession gives the company (or Google) at least one month’s notice that it will be subject to the code.

“This means Facebook would have a month to strike more deals to avoid it, or pull news again so they wouldn’t be subject to it,” Professor Leaver said.

Will Facebook end up paying less money?

It’s likely.

Under the code, Facebook would have had to negotiate with news producers according to strict rules, Professor Leaver said.

Now these deals are being struck behind closed doors.

“Getting deals done before or around the code means Facebook is still calling a lot of the shots in terms of what the contracts specify,” Professor Leaver said.

We don’t know how much Facebook will pay news producers, but James Meese, a media law and policy researcher at RMIT University, estimated it could be similar to what it’s currently paying news producers in other countries to use their content in Facebook News.

Facebook News, which is a tab within the app that features original journalism, is a new feature the company is rolling out in the UK.

“They were planning to introduce Facebook News here at some point,” Dr Meese said.

“Paying some money to news producers is business as usual for them.”

Let that sink in: Facebook may end up paying news producers what it would have paid them anyway, without the threat of being subject to the code.

“I’m guessing the Facebook deal [with news publishers] will be significantly less than the Google deal,” Professor Leaver said.

“Facebook has been thumping the table that it should be treated differently.”

Will Facebook end up paying fewer news businesses?

Again, probably.

Under the code, any news media business with revenue of $150,000 or over could negotiate with the platform to be paid for content.

Under the new arrangement, Facebook probably only needs to strike deals with the big players.

“One would assume that as long as the big players are kept happy, that may well be enough. It’s really up to the Treasurer,” Dr Meese said.

“There are smaller outlets that may well not see a dollar.”

This makes regional Australia, which tends to be served by smaller media outlets, the big loser under the new deal, Dr Meese said.

Professor Leaver agreed that regional Australia was the “clear loser”.

Google has struck a deal with ACM, which owns several large regional mastheads including The Canberra Times, The Newcastle Herald, The Examiner, The Border Mail, The Courier and the Illawarra Mercury.

But other regional news businesses may well miss out.

Meanwhile, big media companies such as News Corp came out on top.

“Rupert Murdoch is the biggest winner here,” Professor Leaver said.

“He’s already paywalled most of his sites. Now he gets money for linking to things that people can’t read without a subscription.

“Without his political clout, we wouldn’t have a bargaining code.”

What did the government achieve?

Whether or not the bargaining code is ever used, the government got what it wanted: a large sum of money flowing from platforms to news publishers.

It’s the threat of the code that forced tech companies to negotiate, Dr Meese said.

“Facebook finally realised that the government’s intention here was never to use the code the way it was written.

“The intention was to use the code as a sledgehammer to force platforms to pay.”

Last week, when reports broke that Google had negotiated deals with Australian media companies worth tens of millions of dollars, the Treasurer claimed credit.

“None of these deals would be happening if we didn’t have the legislation before the Parliament,” he said at the time.

But legislating only to force parties to negotiate comes at a cost: the legislation.

Aside from the provisions about money, the code also included requirements for platforms to give access to engagement data and notice of algorithm changes.

“They’ve clearly had a win, but it might not be the greatest win of all time,” Dr Meese said.

“What’s the point of the bits and bobs of legislation if it may not be used that regularly?”

So … who won and who lost?

Facebook, Google, the Australian government and news businesses all emerge from the recent events as winners, Dr Meese said.

He gave the government’s performance a “B-plus” and Facebook a “C”.

Facebook’s victory came at the cost of a public relations disaster. Either accidentally or otherwise, its news ban had a chaotic effect, blocking access to important information on emergency services pages in the midst of the West Australian bushfires.

“Facebook thinks they won, but I think they’re misreading the room a bit,” Professor Leaver said.

“Australians are angrier with them than they realise.”

A recent blog post by the company’s vice-president of global affairs and communication did not apologise for the news ban disruption.

Google comes out of the Facebook news ban looking good, Professor Leaver said.

Having mounted a PR campaign and threatening to withdraw its services, it abruptly backtracked and struck deals with publishers instead.

Google also gets to enjoy the concessions Facebook negotiated and ultimately paid for with its reputation.

And the Australian public? They come out of this as losers, Professor Leaver said.

On one hand, they endured the disruption of the news ban and Facebook treating them like a political football for about a week.

On the other, they will benefit from the tens of millions of dollars that may now be invested in journalism.

However, there’s no guarantee the news companies will use the money for public interest journalism, or any kind of journalism at all, Professor Leaver said.

“That sucks.”

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