Australia’s battle with Facebook, Google has wider implications

As of this Tuesday, Facebook has decided to begin restoring news pages for its users in Australia. This decision to unblock follows an ugly spat with the Australian government that had been festering for close to a week, during which time Facebook was aggressively seeking to get the Australian government to scrap an upcoming law — the News Media Bargaining Code (NMBC).

While it is yet unclear who blinked first and what the new agreements between the Australian government and the social media giant amount to, there is strong reason to believe that the plot is only about to thicken. At stake are the question of sovereignty and the risks of governments losing control over national communication and their public sphere.

In contrast, the face-off between the Australian government and Facebook has been overwhelmingly presented as being a bitter dust-up over money. That is, the NMBC legislation is only aimed at readjusting the existing digital revenue sharing ratios between news publishers and distribution platforms. If implemented, the belief is that the legacy media would no longer remain a financial hostage to the digital distributor who controls the market.

The NMBC stipulates steep penalties — up to 10 per cent of all revenues generated by platforms within Australia — if the platform corporation fails to reach an acceptable understanding or bargain with a news publisher.

While the Australian intervention to protect its media industry — especially the legacy media — has been seen by governments and authorities elsewhere in the world as pioneering and precedent-setting, it has drawn sharp criticism and opposition not just from the usual suspects of Google and Facebook, but from many others who see the legislation as flawed in its understanding of how the internet works and as really an attempt to protect News Corp. One must note that the ownership of Australia’s newspapers is one of the most concentrated in the world. A 2016 study on media ownership and concentration showed that Australia has the most concentrated newspaper industry in the world, after China and Egypt.

While Google’s initial reaction was to dismiss the NMBC as “unworkable” and it threatened to pull out of Australia, Prime Minister Scott Morrison remained unperturbed and kept his response short and stern: “We don’t respond to threats.” But after Microsoft Corp stepped in with the offer to lend its search engine, Bing, Google fell in line, realising, perhaps, that losses from Google’s lucrative search and non-news business in Australia would far outweigh whatever it would forfeit in terms of additional payouts to news and media companies. The search giant quickly broke rank with Facebook and signed up a slew of deals with nine Australian media companies, including a global contract with News Corp. Facebook, on the other hand, decided to hold out. It not only chose to block its users in Australia from sharing news content but also removed pages from government organisations and charities, including those providing essential information on the COVID-19 vaccination programme (some were restored later following a public outrage).

Facebook insists it pays news companies in Australia much more than the revenue it makes from allowing their content to be shared on its platform. It claims that the Australian media companies earned about $316 million from an estimated 5.1 billion clicks generated by it. Secondly, unlike Google, news content accounts for only 4 per cent of Facebook’s revenues in Australia. So, the social media giant would rather forego that share of its revenue than risk a penalty of a whopping 10 per cent of its entire revenue in Australia should it fail to reach a bargain with local media companies. Also, if Australia does manage to set the precedent for revenue sharing, Facebook justifiably fears that other governments would follow.

So was all this a fight over money? Not entirely. Anyone familiar with Benedict Anderson’s great classic Imagined Communities will recollect the central and defining role of newspapers in the imagining and creation of a national consciousness. India’s post-Independence legacy media, too, was no spectator to nation-making nor did they stay on the sidelines in the shaping of the country’s national sovereignty.

Facebook, on the other hand, is a multinational digital platform with its storage servers located elsewhere and its algorithms hidden as a trade secret. It harvests a vast scale of metadata or what Shoshana Zuboff refers to as “surplus behaviour” from close to 310 million users in India and puts it to a range of applications. Much of this metadata, as former Facebook executive Robert McNamee wrote in his book Zucked, is then actually directed towards manipulating desires and influencing beliefs. Not unexpectedly, Facebook has been implicated in many instances of tilting electoral outcomes and influencing the quality of the public discourse within a country.

Australia’s face-off with Facebook, hence, is more than about revenue sharing. In the backdrop of Morrison’s recent tussle with China on trade, one can note that Australia remains troubled by anxieties over national sovereignty. Consequently, it is quite plausible that Australia may be actively debating whether a multinational digital platform should be allowed to have such a powerful chokehold over communications.

In India, however, the government appears to believe that both Facebook and Twitter can be domesticated. For India’s legacy media, despite not having the concentrated power of a media tycoon like Murdoch on their side, they may soon have to decide whether they want to see Australia’s fight with Facebook as being their own as well.

The writer is an independent journalist

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