Predictable: Meta Announces It Would Not Be Renewing Australian News Deals

The pullout of Meta is predictably not exclusive to Canada. Now, it looks like news links will be dropped in Australia as well.

Another nail has been plunged into the coffin of the lobbyists talking points on the Online News Act. For months leading up to the government folding to Google (and even some days that followed), the firm belief was that platforms were deriving so much benefit from news content that Meta wouldn’t last a week without news content. In the days after the governments surrendered, lobbyists were saying how Meta would be so jealous of the deal that they would be scrambling to work out a deal.

The talking point continues the unbroken streak of lobbyists being wrong about everything in this debate. The talking point hinged on the idea that because Meta had already worked out deals in Australia and other countries, it was proof that Meta really does depend almost entirely on news links and that there was no way Meta would last much longer without a deal here in Canada.

Of course, that talking point had already gone down in flames now that it has been several months in and Meta hasn’t even budged on their position (rightfully so). The talk has, for the longest time, been that Meta was looking at getting out of the business of allowing news links on their platforms. This as the greed of the major publishers around the world reached critical enough levels for them to be demanding payments for the privilege of platforms sending them traffic.

The demand was always destined to backfire sooner or later. It clearly backfired in Canada when Meta dropped news links last year in the midst of lobbyists screaming “it’s a bluff!!!”

Now, we are learning that it is continuing to backfire. Recently, we learned that Meta has announced that it would not be renewing its publisher deals in Australia, France, and Germany. From the Globe and Mail:

Meta said on Friday it will not enter into new commercial deals for traditional news content in Australia, France and Germany.

“Additionally, to ensure that we continue to invest in products and services that drive user engagement, we will not enter into new commercial deals for traditional news content in these countries and will not offer new Facebook products specifically for news publishers in the future,” Meta said in a statement.

The owner of Facebook has oft been at loggerheads with Australia over a requirement for it to pay publishers for news content.

“Meta’s decision to no longer pay for news content in a number of jurisdictions represents a dereliction of its commitment to the sustainability of Australian news media,” Australia’s assistant treasurer Stephen Jones said in a statement.

The government is seeking advice from the Treasury and the Australian Competition & Consumer Commission on its next steps, he added.

So, the Australian government is throwing a temper tantrum over the fact that the free money gravy train is coming to an end. The problem here is that the Australian government has no clue how good it actually had it all this time.

Throughout the Australian link tax debate of 2020, many observers, including us, were convinced that platforms like Meta and Google would have no real reason to enter into any agreements in the first place. After all, the truth at the time was that publishers have long worked hard to put their content on both platforms and trying to make their content on their as visible as possible (and even paying huge sums of money to do so).

What’s more, if Meta and Google did foolishly enter into these agreements in the first place, it would invite other publishers from around the world to push for similar laws so they could get their pound of flesh too. This over payments that don’t really benefit these platforms in the first place.

It was why it was a real head scratcher that the platforms caved to the Australian government at the time and agreed to fork over payments for the privilege of sending traffic to the publishers websites. It made no sense to any of us who have been following the developments.

In the days and weeks since that moment in time, people like us tried to figure out why the platforms folded to the pressure even though they held all the cards. The best speculation we could think of was that the platforms thought that by entering into these agreements, it would raise the cost of any potential competitors entering into the search or social media market – thus ensuring that their dominance in their respective markets are permanently solidified.

Of course, as we noted back then, this was simply a short term solution at best. The possible thinking was that Australia would be a one off incident for the platforms and other countries wouldn’t do the same thing. Us observers then responded by pointing out that if this was the thinking, then all the platforms did was openly invite other countries to do the same for the purpose of scoring free money. The conclusion from us was that the striking of those Australian deals was a huge mistake in the end on the part of the platforms.

In the years since, that’s exactly what happened. Other countries including countries in Europe as well as Canada and the United States started tabling and passing similar link tax laws at the behest of the media monopolies operating in their respective countries. The floodgates had opened.

Now, at what point did the platforms realize they made a massive business blunder with Australia isn’t clear. Still, we know it happened somewhere between when they forged those Australian deals and when Canada tabled its link tax law in the form of Bill C-18. Now, the platforms have a massive mess of their own doing on their hands.

With the announcement, it is clear that, at the very least, Meta is working on fixing their massive business mistake all those years ago. Whether Google follows suit remains unclear at this stage.

Long story short, the reason why the Australian government and their media lobbyist pals had it so good was because the platforms made a massive strategy error in their favour. It was only a matter of time befor the gravy train would come to an end. Judging by the announcement we are learning about today, that’s exactly what is happening.

Drew Wilson on Twitter: @icecube85 and Facebook.

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