Facebook Unfriends Australia: How This Affects Mutual Friend India

Facebook has made it clear that it will not let the revenue-sharing equation with news publishers change so easily.

(Image: Vedika Dawar/The Quint)

Editor: Sandeep Suman

Facebook has unfriended Australia because it says it has been misunderstood. An angry Australia has spoken to mutual friends, including India, over teaching Facebook a lesson. Google, too, had posted on Australia’s wall threatening to unfriend the country. But, now Google has grudgingly told the countries that it wants to stay friends.

This, in a nutshell, is how the spat between the Australian government and Big Tech is unfolding over getting Facebook and Google to pay news publishers for displaying their news content. Australia is almost ready to bring a law that will require the tech giants to strike commercial deals with media companies within 90-days.

According to the government, the law will provide better bargaining power to news companies who've struggled for ad revenues while Google and Facebook line their pockets.

Google has agreed and already struck multi-million-dollar deals with three media giants in Australia, but Facebook has done the opposite and blocked news from its platform altogether.

In order to better understand this complex fight between Big Tech, governments and news publishers, we’ll explore three vital questions:

1. Why Google agreed to pay news companies while FB did not?
2. Will this reset the relation between news publishers and Big Tech news aggregators?
3. Why is it important for India and the world?

Why Google Agreed to Pay News Companies While FB Did Not

Facebook estimates that only about 4 percent of posts on the network is news content. Google says news-related queries accounted for just over 1 percent of the total queries in Australia.

So, to answer the first question: why did Google cave while Facebook refuses to pay news companies? Make no mistake, Google threatened to take a more extreme step than Facebook and pull out its search service altogether from Australia. So, why did Google not go the Facebook way?

Simply put, Facebook can afford to do it but Google can’t. Search is what Google cares about and removing links to news stories from Google would splinter the search engine in Australia, opening it up to rivals like Microsoft Bing and Yahoo.

Even though it enjoys a market share of 95 percent, Google does not want to expose its users in any country to its rival’s services.

Does this Reset the Relation Between News Publishers & Aggregators?

This brings us to the second question: Does this reset the relation between between news publishers & aggregators? Or can the revenue sharing equation be changed easily? The word “relation” here is important. Facebook has said the proposed Australian law “fails to recognise the fundamental nature of the relationship between our platform and publishers.”

In doing so, Facebook has made it clear that it will not let the revenue sharing equations change so easily. And even if the relationship is reset, it will not be reset on the terms set by the government or the publishers.

Zuckerberg & Co have emphasised that it brings much more value for news outlets than they do for Facebook.

Facebook said it sent more than 5 billion clicks to Australian publishers, whose value he estimated at AU$ 407 million.

Also, since 2016, Facebook actively prioritised favouring posts from friends and family on our timelines over posts from publishers. On 18 February, Facebook showed it can block news and still thrive but can publishers, especially smaller independent ones, do without the traffic it gets from Facebook?

So, the relationship has, of course, been an unequal one, and Facebook wants to make it clear who is calling the shots and bringing in the revenue.

Why Are Developments in Australia Important for India & the World

This brings us to our third question: Why are these developments in Australia important for the world, especially India? It is clear at this point that this isn’t just about news publishers. This has also blown up into a fight between the government and Facebook.

Every major country is currently trying to cut the Facebooks and the Googles to size and make them much more accountable. Be it over issues of news revenue, privacy, misinformation or antitrust abuse of monopoly – the EU, the US, Canada and India are all trying to clamp down on Big Tech’s unchecked powers.

But here’s the thing: Australia’s proposed law has also been severely criticised about concerns that it would simply transfer more money from tech platforms to the big media houses like NewsCorp and do very little for the smaller, independent journalists or journalists.

As of now, Google has struck deals with three of the largest media companies, including Rupert Murdoch’s, sparking serious concerns of further concentration of powers in the media industry while smaller ones languish.

Importantly, the proposed law also says nothing about media houses using the money to create journalism jobs, pay journalists better, spend on news gathering or bolstering strong journalism.

While Facebook or Google blocking news wouldn’t deal a death blow to a NewsCorp, it could severely affect smaller news organisations.

One hopes that the current fight is ultimately as much about news and journalism as it is about balance sheets of large companies.