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Business Unusual

Facebook and Australia, what it means for the rest of us

24 February 2021 7:15 PM

Will the deal with Australia help publishers around the world?

It was a long time coming but the Great Barrier Beef (as MSNBC described it) came to a head last week when Facebook blocked news content and pages from posting on their platform in Australia.

A new law which would compel platforms like Google and Facebook to compensate news publishers for content that was displayed on their sites.

Google has agreed to deals of about $1 billion while Facebook held out until 23 February 2021. The Australian Government and Facebook agreed that the negotiations would not force a deal on Facebook.

Facebook have set out their position in a post which suggests that they would be willing to use a model to invest/compensate publishers in Australia and elsewhere offering to pay about a $1 billion to publishers in the next three years.

Is there an obvious villain? I don't think so, but it does not mean no-one is without blame either.

Here are three scenarios which all play a part in understanding the situation

  • Facebook and Google are bad and stealing revenue
  • Facebook and Google are better at the ad game but need news
  • Facebook and Google are publishers and should create their own publications

Facebook and Google are bad and stealing revenue

  • By displaying news you create a place for people to read curated headlines
  • Scanning headlines along with watching news videos, listening to news clips and podcasts can all be done on the platforms properties which primarily generates revenue for the platforms even though the platforms don’t create any of it
  • Facebook and Google rely on presenting the most they can display to generate response to a post while also using their own browsers to display content when clicked to limit how long you may be away from their platforms
  • There is a way to get more clicks, but that is clickbait and news organisations rightly do not want to write headlines like that, many organisations that are not invested in news are willing to write clickbait and some news organizations feel compelled to write them
  • Facebook and Google are massive and their traffic is typically the primary source of their traffic, but the platforms decide who will get profiled and who will not, effectively killing some news organisations when they stop displaying the content
  • Facebook and Google rely on many users not understanding how funding or access works so are effectively the web for most people it is their source of news so users not think about the implication for others and the long term negative effects

Facebook and Google are better at the ad game but need news

  • Facebook and Google started with nothing and worked hard to become the preferred destination for users, they don’t force people to use their pages
  • A major reason for Australia to act is that politically companies like News Corp and Seven West have influence on the Morrison government it may not have taken such an active role if it was not for the likes of Rupert Murdoch and Kerry Stokes wanting to.
  • Like newspapers did not realise how much losing classifieds would cost them when they moved online, all media are being outplayed online as Google and Facebook allows for many more advertisers to access a massive audience online and at a fraction of the cost that the media charged
  • Media companies don’t manage their ad platforms but typically hand it to Google to manage the demand and price
  • Facebook collects huge amounts of personal data, media companies are unlikely to be able to catch up and are typically compelled to include Facebook and Google tracking software on their sites allowing the two platforms to improve their own targeting
  • News is a big driver of engagement for social and search platforms. They are able to tell what works but are not in the business of creating that content
  • Media companies could look to build social platforms onto their sites, the comment section is a basic version of this, but none have managed to make their content section the reason to join in order to see what news friends or people with similar interests are reading. Reddit is a model of what that may look like though
  • It is possible that with more stable online income, media companies may look to become more like social platforms which raises the possibility of the third scenario
  • Australia might still be challenged if Google or Facebook can move US authorities to push them to stop via trade agreements with the US
  • It seems unlikely that given the views that both sides of the US Gov are no longer fans of the big platforms and that they need to consider what other countries may say in support of Australia

Facebook and Google are publishers and should create their own publications

  • With more regulators likely to want to intervene on the power of Google and Facebook, they may seek to take a leaf from Amazon’s book. It started as a retailer then a marketplace and then as both.
  • Facebook and Google could acquire media organisations or do licensing deals to provide news content as their own either from providers like Reuters that provides such a service or by using the deals envisioned in the Australian code to buy the right to use news that it chooses. (Google and Facebook are implementing this but keeping it separate from the news feed for now)
  • The principal reason it is unlikely to do so in the US is the protection it enjoys to not be held legally liable for what others post to their platform. Should they actively publish news they would need to either accept responsibility for everything that is posted or get a revised protection to only be responsible for what they post themselves.
  • Given that Facebook and Google do rank content it does not make sense that they can benefit from the added engagement for promoting content that gets lots of attention but not take responsibility for it being wrong while also getting the benefit of being a publisher.
  • It either needs to take responsibility for everything it chooses to promote or it can’t promote anything.
  • If a model of licensing was chosen by platforms they would allow for many niche publications to create a fair business for themselves while still offering those same general or specialist news providers of providing a more extensive or comprehensive service for subscription.

Implications for South Africa

This leads to a second element regardless of which scenario is used that is even more critical. How to regulate for dealing with mis- and disinformation (the former is unintended or ignorant false posts, the latter knowingly false posts).

Both platforms seek to increase time spent on their platforms either by finding what you are looking for or serving you content that will get you to engage. Inflammatory content performs best for general audiences. It is not the truth that makes it highly engaging, in fact it is the false stuff that works best. If you consider how much better fiction does as literature or movie and TV content you can see how the same might be true for other content and the power of actual fake news.

A positive element of the code is that it will see the Australian Government decide who qualifies as a media organisation, something that could then also allow for limitations to be placed on publishers that don’t meet the requirements or abide by factual publishing rules.

The Global Disinformation Index reviews and ranks news organisations for credibility and transparency and recently reviews South African sites. A formal index might be required for an organisation to be accredited as a news site and to qualify to access funds through partnerships while serving as a simple check for users to know that the site is a trusted one.

SA MP’s will be calling for Facebook to appear before the Communications Committee to respond to questions about misinformation ahead of the local elections.

If not addressed the situation will cause real lasting harm to the platforms, their business models and society.

24 February 2021 7:15 PM

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