In what looked like a standoff that would literally crush Facebook, its brands and its practices; the American social media and tech giant signed deals with Australian news firms for content days after it blocked Australian firms from posting news on the platform.

Contrary to Facebook, Google signed deals earlier than it, planning to spend USD$ 1 billion over the next three years.

This is the same amount Facebook plans to spend in the Australian new industry over the next three years.

Does the announcement come as a surprise? In all honesty, it sure does.

Why? Because it comes just days after a heated debate with the Australian Government over how much the social media giant should pay news publishers for publishing content on the platform.

According to Nick Clegg, Vice President of Global Affairs at Facebook:

“Facebook is more than willing to partner with news publishers. We absolutely recognize quality journalism is at the heart of how open societies function – informing and empowering citizens and holding the powerful to account.”

Campbell Brown, Vice President for Global News Partnerships at Facebook had to say the following:

“Going forward, the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation. It’s always been our intention to support journalism in Australia and around the world.”

What had happened earlier between Facebook, Australian News Firms and the Government of Australia?

It was in the ending days of February that Facebook blocked almost all Australian news on its platform. It did so as a protest against a legislation proposed by the Australian Government, which obliges digital platforms to compensate media outlets for online content.

The company inadvertently also blocked access to government information pages.

In response to the social media giant’s unfair blockage, Australia’s health department confirmed that it won’t advertise on Facebook anymore as it sought to hit Facebook where it got hurt the most.

It indicates that Facebook will lose out on Australia’s USD$ 20 million public information campaign, which was designed to convince Australians to get vaccinated against the COVID-19 induced Coronavirus and reject the anti-vaccine sentiments.

This spelled disaster for Facebook not just in Australia but also around the world. It also hurt Facebook at the place where it felt the most pain.

Consequently, Facebook’s managing director for Australia Will Easton stated that the pages blocked previously will be restored in the coming days. 

Google had earlier copied Facebook’s stance, by blocking Australian news providers from its search results among 1 percent of Australians. However, the Alphabet owned Technology giant conceded after agreeing with Australian news giant News Corp over payments for content.

What have Facebook and the Government of Australia agreed upon?

Australia’s Minister for Communications Paul Fletcher and National Treasurer Josh Frydenberg announced on Tuesday, February 23, about the deal reached between the Government of Australia and Facebook regarding the legislation ‘Media Bargaining Code.’

The Government stated that it may not apply the code to Facebook, provided it can prove it has cut enough deals similar to its agreement with News Corp and with other publishers. The government also agreed to give digital platforms a month’s notice before deciding whether to apply the code or not.

This does indicate that social media and tech giants won’t be able to act unfairly in the Australian market. There were earlier calls for regulations of practices and activities of the big tech in all spheres of life. 

It is confirmed that Australia has taken the necessary concrete steps towards regulating the big tech and their unfair business practices.

Has Facebook signed deals elsewhere too?

Last month, Facebook announced deals with a number of publishers in the United Kingdom namely:

• Financial Times.
• Sky News.
• Daily Mail Group.
• The Guardian.
• Telegraph Media Group.

Consequently, publishers will see their content featured in Facebook News. It is a dedicated section within the app featuring curated and personalized news from numerous national, local, lifestyle and sports publications.

Is Facebook happy about signing deals or is still sour?

Despite optimism from both sides regarding the agreement to the law, the social media giant is in a sour mood. The company Vice President of Global Affairs Nick Clegg, took a cloaked jibe at News Corp last week in a social media post criticizing Australia’s new legislation.

The law aims at setting a fair price for the Australian journalism that digital platforms exhibit.

According to him:

“It is ironic that some of the biggest publishers have long advocated for free markets and voluntary commercial undertakings now appear to be in favor of state sponsored price setting.”

Executive Chairman of News Corp. Australia Michael Miller said that in the previous week, his company had monetary negotiations with Facebook regarding payment for content.

He stated the following in front of a Senate inquiry regarding media diversity in Australia:

“Having been someone who’s dealt with Facebook over the past months, we have some weeks where we’re getting good engagement and think we’re progressing and then you get silence. I think the door is still open.”

How powerful is News Corp. in Australia?

News Corp. owns most of Australia’s major newspapers. Analysts argue that the US-based international media empire is the main force for the incumbent and conservative Australian Government making Facebook and Google pay for news.

In fact, the global media giant announced a wide-ranging deal with Google covering operations in the United States, United Kingdom and Australia.

Has Google followed suit?

At first, Google was locking its horns against the Government of Australia. However, it later changed its stance and is planning to spend USD$ 1 billion on news over the next three years.

Google announced in October last year that it intended to pay publishers in creation and curation of content for a new mobile product known as Google News Showcase.

The app went live initial in Germany and Brazil before it is launched in other countries.

German publishers Der Spiegel and Die Zeit including Brazil’s Folha de Sao Paulo signed up as part of the rollout program.

According to Google’s CEO Sundar Pichai:

“The business model for newspapers – based on ads and subscription revenue – has been evolving for more than a century as audiences have turned to other sources. The internet has been the latest shift, and it certainly won’t be the last…. We want to play our part by helping journalism in the 21st century.”

Conclusion

It is undeniable that both Google and Facebook are among the most powerful of the Big Four Tech Firms, yet it is also undoubtedly true that both firms can, and will be held accountable for all they have done up till now. 

In fact, both of these firms have no escape. They both not only signed deals with Australian, German and Brazilian news firms but are also agreeing to follow Australia’s latest legislation ‘Media Bargaining Code.’

This law has inspired India to create and enact its own regulations to hold the tech industry accountable. It is also time that other countries prepare similar legislations and the European Union has been eying a similar move in this matter.