Facebook Shuts Down News Feeds in Australia

Facebook has blocked news feeds in Australia. This in response to the Australian governments push to implement a link tax law.

It is widely considered the nuclear option. For more than a year, Australia has been pushing for a new link tax law. News aggregators have been fiercely opposing this law and have been trying to work out some sort of balance.

Things started turning sideways when Facebook, back in September, threatened to pull the plug on their news feeds should the law become unworkable. Things seemed to be taking a turn for the worst when Google then threatened to pull search out of the country as well. So many signals were pointing to a government not willing to be reasonable and, instead, opting to take a hard line against those aggregators.

Then, Google surprised some by unveiling a New Showcase, a relatively new feature aimed at trying to please the big publishing corporations. In a way, it was something of a peace offering in an effort to show that there is a middle ground in this debate.

Now, we are learning that Facebook has now fully lost patience with the situation. They have decided to pull their news feeds out of the country altogether. From the BBC:

Facebook has blocked Australian users from sharing or viewing news content on the platform, causing much alarm over public access to key information.

It comes in response to a proposed law which would make tech giants pay for news content on their platforms.

Australians on Thursday woke up to find that Facebook pages of all local and global news sites were unavailable.

Several government health and emergency pages were also blocked – something Facebook later asserted was a mistake.

Those outside of the country are also unable to read or access any Australian news publications on the platform.

The Australian government is furious that Facebook made this decision. From CNBC:

Australian Treasurer Josh Frydenberg said it was “wrong” and “unnecessary” for Facebook to block Australian users from all news content — including those from the government — on its platform.

“Facebook was wrong. Facebook’s actions were unnecessary. They were heavy-handed and they will damage its reputation here in Australia,” Frydenberg said on Thursday.

“Their decision to block Australians’ access to government sites — be they about support through the pandemic, mental health, emergency services, the Bureau of Meteorology — were completely unrelated to the media code, which is yet to pass through the Senate,” he said.

Some broadcast media outlets are trying to spin this as an effort to try and avoid paying media companies what they are due, but that perspective completely misunderstands the situation. Even if you were to subscribe to the ludicrous conspiracy theory that big tech companies owe media outlets money for hosting their posts that link to their sites, then shouldn’t media outlets be happy that Facebook is no longer “stealing” their content? After all, in this situation, Facebook is no longer using their content some actually believe is stolen in the first place.

Facebook, for it’s part, issued their own statement on the matter. It says, in part:

The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content. It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter.

This discussion has focused on US technology companies and how they benefit from news content on their services. We understand many will ask why the platforms may respond differently. The answer is because our platforms have fundamentally different relationships with news. Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content. On the other hand, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue.

In fact, and as we have made clear to the Australian government for many months, the value exchange between Facebook and publishers runs in favor of the publishers — which is the reverse of what the legislation would require the arbitrator to assume. Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.

For Facebook, the business gain from news is minimal. News makes up less than 4% of the content people see in their News Feed. Journalism is important to a democratic society, which is why we build dedicated, free tools to support news organisations around the world in innovating their content for online audiences.

It’s really hard to find fault in this particular statement. This is, after all, a decision being made by a private company. Facebook is not a governmental organization and it doesn’t have an obligation to allow users to share news on their platform. If the Australian government has a problem with it, well, that’s their problem, not Facebook.

As the statement alludes to, news publishers need aggregators far more than aggregators need news publishers. In this case, Facebook is suggesting that if they wipe out all news from their network everywhere in the world, it would only marginally negatively impact them. On the flip side, a number of media outlets are screaming bloody murder over this. This is because they are almost repeating what happened in Spain almost to the letter in this situation. They know that their traffic is going to tank hard because of this decision. For all we know, for some of the smaller outlets out there, this could be a full-fledged death blow that sees them go off the edge and into bankruptcy.

When we call a link tax suicidal, we aren’t saying it because we are causing unnecessary drama, we are saying this because it can very easily kill smaller outlets. Facebook itself is warning Canada not to repeat Australia’s mistake, so if Canadian publishers think that their effort will be different, then every outlet needs to take a look at their traffic. Ask themselves, “what would happen if all of Facebook’s traffic were erased?” If Canada repeats this mistake, that will happen and Facebook is proving it. Simply put, this is big publishers biting the hand that feeds it.

Some outlets are trying to spin this story as unprecedented, but, as we all know, this is happening or has already happened in other countries. Spain is the biggest example where Google simply left the country altogether when publishers demanded to get paid for getting linked to. Their traffic tanked and subsequent revenues dried up. They were left begging for Google’s return. What is ultimately happening in Australia is nothing more than history repeating itself. There were plenty of warnings that this would happen and big publishers and governments simply chose to ignore those warnings.

One question here is whether the Australian government can really do anything about this. There is, of course, the possibility that they can issue even more heavy handed laws against Facebook, but the result of that could be Facebook simply pulls out of the country entirely. The only real winning move the government has here is to finally back off their current approach and, at minimum, try to find a middle ground here. Otherwise, we don’t see what the government can do at this stage that would help the situation.

Probably the wildcard in all of this is Google. With Google announcing its Showcase feature, it’s possible that big publishing can simply latch onto this feature as a lifeline. If publishers and government simply choose not to go along with it, then Google may very well ultimately choose to follow Facebook’s footsteps and head for the exits as well. With Google and Facebook being out of the picture, this will put a serious hurt on all the media outlets in the country.

At any rate, we are now in the situation where one major player has deployed the nuclear option. We’ll have to see where things go from here. At the very least, Canada gets to see what they are in for before deciding to attempt this insane policy as well should they attempt it in the first place.

Drew Wilson on Twitter: @icecube85 and Facebook.

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