While Google’s response to plans by the Australian government to force social media giants to pay for news has been nuanced, Facebook’s response has been provocative.
Facebook announced last Wednesday that it would block news-sharing on its Australian site.
I suppose Facebook hopes to generate outrage from Australians so that the government will change its mind, but it’s not going to work. The social media titans are facing similar moves by governments around the world, including Canada. Australia is the just the latest battleground. Google has reached deals with publishers in Britain, Germany, France, Brazil and Argentina.
News is vital to a functioning democracy and it must be funded. But How? We pay for news one way or another; either with our attention through advertising or by subscriptions. The news that you receive through CFJC Today and Kamloops This Week is paid by advertisers. The Globe and Mail requires a subscription.
As newspapers folded one by one, one laughable solution to the news drought was an army of “citizen reporters” who blog the news. What we got instead was an army of ill-informed bloggers with bull horns, each shouting louder to be heard over the din.
Print publishers complain that social media giants make money on their news. Facebook and Google respond that they only post stories that publishers freely distribute and that publishers are the ones who benefit through increased circulation. But postings by publishers are a loss-leader: they hope that readers will be attracted to their sites and eventually subscribe to their news.
You’d think that this would be a win-win situation. Facebook and Google make money from news posted on their sites and publishers reap the benefits of increased exposure.
Facebook argues that that the Australian government is trying to fix a problem that doesn’t exist. Facebook said that the proposed legislation “fundamentally misunderstands” the relationship between itself and publishers, arguing that news outlets voluntarily post their article links on Facebook, which helped Australian publishers earn about $400million in 2020 through referrals.
The trouble is that the traditional business model for news publishers is broken. Paying reporters to dig up relevant news is expensive. Facebook and Google don’t pay for the news and yet get they receive revenues from it.
However, Facebook has a point: they are doing news publishers a favour and if they didn’t post reliable news stories, fake news would fill the vacuum. But their response has been ham-fisted compared to Google’s. Even though their complaint is the same, Google reached a global deal with Rupert Murdoch’s News Corp., owner of The Wall Street Journal and two-thirds of Australia’s major city newspapers, to develop a subscription platform and share advertising revenue.
The difference in approach mirrors the culture of the two social media titans. When Mark Zuckerberg said of Facebook, “Move Fast and Break Things,” it reflected the provocative culture of the company.
Google’s original motto was “Don’t be evil” which later became “Do the right thing.”
Canada is watching as the battle unfolds globally. Canadian Heritage Minister Steven Guilbeault will be introducing legislation that will require Facebook and Google to compensate news publishers. Will the response of be one of retaliation or cooperation?
(NOTE: Since this column was published, Facebook has reached an agreement to pay news publishers)