Facebook's news threat cuts both ways

The Treasurer, Josh Frydenberg, has accused Facebook of a
The Treasurer, Josh Frydenberg, has accused Facebook of a "heavy-handed" response. Picture: Karleen Minney

Most Australians who played street cricket as kids would be keenly aware that when the rich kid said they were going to take their bat and ball and go home it was a good sign they were losing.

While it is too soon to say how the tussle over how much social media giants, such as Google and Facebook, will have to pay for Australian news media content will turn out, this is a fair analogy.

Facebook's latest response to the ACCC's draft News Media Bargaining Code has been to say if it becomes law users would be blocked from sharing local and international news on its platforms, including Instagram. Google has already indicated it could curtail the level of services it offers if the code becomes law.

Such responses seem to be a dramatic overreaction given the draft code only calls on the tech companies to negotiate with for-profit media businesses in "good faith" to reach an agreement to pay for the news content hosted on their platforms. If those negotiations broke down an independent arbiter would make the final decision.

By apparently preempting any attempt to reach a "good faith" settlement, Facebook and Google are rejecting the principle they should pay a reasonable amount to host the copyrighted works of Australian journalists and media companies for their own financial gain.

It seems ironic that in his most recent "update" Facebook's Will Easton claims the current, unregulated, situation works more to the advantage of the media companies, who have complained of being ripped off for years, than it does for Facebook. Really?

Does anybody, anywhere, seriously believe the proposed code would further disadvantage companies such as Australian Community Media, Nine, Seven, News Ltd and the like, who pay top dollar to provide reputable, verifiable, and accountable reporting while supporting tens of thousands of local jobs?

Mr Easton's claim the draft code "misunderstands the dynamics of the internet" is equally disingenuous. What he means is the principle of "fair exchange is no robbery" inherent in the code is foreign to the understanding of the "dynamics of the internet" held by Facebook, Google et al. Tuesday's threat to shut down news posts across Facebook and Instagram is his way of saying if his company can't make the rules it doesn't want to play this game.

Whether or not this threat, or Google's to reduce its level of services to Australian users, would ever be acted upon remains to be seen. The internet, despite its ubiquity, is less than three decades old. It has proven to be a particularly Darwinian market place. Facebook was not the first social media platform. Google wasn't the first search engine. Both would be aware of the peril in cutting back on services. Paying off legacy media would be the least of their worries if, or more likely when, the Hobbesian world of cyberspace throws up leaner competitors whose owners were willing to play fairly with quality content providers.

The real message from Facebook and Google is that their claims to care about and support journalism are little more than a sham. The intensity of their opposition to the code actually validates it. They fear it will bring about real change, and create a model for other jurisdictions to emulate. This is just round one. On the one hand the IT giants have far too much invested to roll over at the behest of a national government. On the other, Australia's "legacy" media companies are in a fight to the finish.

Unless the boundaries, and the balance of power, is reset our media landscape will continue to decline. That would be a tragedy for news consumers, and for democracy.

This story Facebook's news threat cuts both ways first appeared on The Canberra Times.