With Meta ending its publisher deals in Australia, some are running the scenarios out to see what could happen. None look particularly good.
Last month, we reported that Meta is going to be ending its “deals” with publishers. The move essentially corrects a horrible mistake the company made in 2021 when it notoriously decided to back off of dropping news links in Australia and sign the deals. The move was seemingly a short term solution to a problem that was threatening to spiral out of control.
In the years since, we’ve seen many countries either push or pass similar link tax laws. Our prediction that every publisher around the world wanting their pound of flesh from the platforms came true. The math added up and, somewhere along the line, Meta realized that they have made a horrible mistake. The biggest sign that Meta learned its very expensive lesson came in August of last year when it dropped news links in Canada rather than go along with the Canadian version of the link tax law. With the more recent announcement of not renewing its deals with Australian publishers, it seems that a similar outcome was destined to happen in Australia as well even if it came a couple years late.
The Australian media did what the Canadian media has been doing for quite some time in the weeks since: publish disinformation and conspiracy theories in their doomed bid to reverse the situation. Obviously, the disinformation campaign didn’t work in Canada and there is little hope that it would be any more effective in Australia. You’re not exactly going to lie your way out of the situation – especially now that Meta has a real world result of what happens when you block news links.
Those results, simply put, were that people didn’t really mind the lack of news articles on the platform. Traffic remained unchanged while the users themselves seemingly shrugged at the lack of a presence of news on the platform. The only thing publishers accomplished in their campaign to have a link tax law was an unprecedented self-own where media companies both small and large suffered the consequences of the media’s relentless greed. The news media death toll of the Online News Act in Canada is only continuing to rise with seemingly no end in sight that things will change.
The more recent sign things are going sideways for Australian publishers is the fact that Facebook ended its news tab in both Australia and the US. The move was the latest signal that the platform is continuing to move away from news content and politics entirely. The move isn’t necessarily a massive game changer in and of itself, but it did signal to publishers that their content is not all that welcome on their platform in the first place. The direction would’ve happened regardless of the push for the link tax, but the demise of such content was simply hastened. What’s more, it exposed a fatal flaw on the part of publishers. At a time when the threat was that they were going to lose access to their audience, they were acting as though they were the centre of attention and the only reason platforms were successful. This while the exact opposite was true. If anything, the media companies should have been trying to convince Meta that their content was worth promoting all this time instead.
With the media in the process of kicking themselves out of some of the largest platforms in the world, speculation is continuing on where things go in Australia. A recent article on The Saturday Paper seems to offer some realistic scenarios for the different moves the Australian government could make to try and salvage the dying News Media Bargaining Code. None of them seem particularly promising as whatever move the government makes will only cause further damage in this already tense situation:
As the legislation reached its final stages in early 2021, Google and Facebook became increasingly alarmed that the law could set global precedents.
There is a loophole. The legislation says a platform can avoid being designated if it is making enough of a contribution to the local news ecosystem. Google was first to take the hint, locking in a series of deals with Australia’s big publishers, mostly to run for four years.
If the ACCC could prove Meta was abusing its market power … that could see separate, and ongoing, enforcement action. The end point might only come if Meta simply withdraws from Australia.
Even if Meta is designated, removes all news content and successfully navigates the bargaining code arbitration process, that might not be the end of the matter. In November, ACCC chair Gina Cass-Gottlieb flagged that that could itself be seen as an abuse of Meta’s dominant position. “What that would reflect would be quite a significant step in exercising market power, which would raise other questions for the ACCC under other parts of our powers,” she told the Victorian Country Press Association. “There are a set of steps that could be taken.”
In other words, if the ACCC could prove Meta was abusing its market power by removing news content to beat the code, that could see separate, and ongoing, enforcement action. The end point might only come if Meta simply withdraws from Australia altogether. That would affect any business, small or large, that markets itself on Facebook, Instagram, WhatsApp or even Threads. The impact on sales would likely be large enough to flow to the overall economy.
In other words, the more the government feels like it should interfere in this situation, the more damage could be done as a result. An outright withdrawal by Meta from Australia altogether would cause an incredible amount of damage that goes well beyond just the media companies acting like complete idiots. A huge swath of small businesses would also get swept up into the large media companies war on the internet. Such an apocalyptic scenario is so massive, it’s a scenario rarely contemplated in the link tax debate in Canada. It was only under some very specific hypothetical scenarios – one of which where the government passes a follow-up law making it illegal for Meta to block news links on the platform. Blocking the whole country would then be considered plausible, but this is a road that the Canadian government hasn’t travelled down (and very obviously shouldn’t).
Some link tax apologists argue that blocking a whole country for a platform is out of the question because the platforms in question can’t risk losing such a huge amount of their audience by blocking an entire country like that. Such arguments are easily batted away by the history of how platforms react to really bad laws in different countries or states. For instance, Twitch, a platform that is smaller than Facebook, blocked South Korea over terrible “network fees” laws. Another example is Aylo blocking several states including what could potentially be the state of Florida over the states dangerous age verification laws. This after the company blocked the populous state of Texas. The bottom line is that platforms are a global presence and they not only can, but will block whole parts of the population if the government can’t seemingly get along with the digital world of today.
At the end of the day, the people that are hurt by such poor decision making on the part of government are the people living in that jurisdiction. The small businesses that set up shop on the platform, the people who use it, the ones that get huge financial benefits from advertising on those platforms, and all those who benefit from the economic spinoffs that result from it. The platforms, on the other hand, can simply focus their attention elsewhere. One country suddenly getting cut off isn’t really that big of a deal to these large companies. Heck, multiple countries getting cut off from the platform isn’t even going to hurt the platforms that much given their general portfolio of services.
The real question here is how much damage the Australian government intends on inflicting on its own people. If it wants to get out of the situation with the most minimal amount of damage is to simply do nothing in reaction. The media companies brought this situation on themselves and now they are faced with the consequences of their actions. The more the government intervenes and tries to “fix” this situation, the more damage it risks unleashing onto its own population. This goes all the way up to Meta leaving Australia altogether which is far from an impossible outcome at this point. Ideally, the Australian government would see the error of their ways and work to rescind the News Media Bargaining Code, but that is, at this stage, unlikely given that some lawmakers are pushing to designate other platforms under the Code.
Internationally, the implications are pretty obvious. If you pass a link tax law, be prepared to have those links removed from the platforms – at least as far as Meta is concerned. Meta’s audience has already spoken that if news links were ti disappear tomorrow, they aren’t going anywhere and they will continue to use the platforms. Lack of news links is far from a deal breaker for a vast majority of users (and some actually go so far as to welcome the lack of news content on there).
The link tax, as a concept, is failing spectacularly at this point. Any country that goes ahead with the link tax despite all the evidence saying what a horrible idea it is is going to find that the publishers operating in their jurisdictions are going to get hurt by this – in some cases, quite severely. Australia is in the process of learning this lesson the hard way. How badly do you want to repeat what happened in Canada and is in the process of happening in Australia? Well, pass a link tax law and join the parade of publishers in the “finding out” phase.
(via @Dylanlindgren)
