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Refriended in Defeat: Australia Strikes a Deal with Facebook

The Australian Treasurer, Josh Frydenberg, was unconvincing in his efforts to summon up courage. The Australian government had been left reeling in the wake of Facebook’s decision to scrap and block Australians from sharing and posting news items on hosted pages. The company’s target of opprobrium: the News Media Bargaining Code.

The Code’s ostensible purpose is to address the inequalities in the news market place by pushing digital giants and news outlets into reaching commercial deals. Failing to do so will lead to final offer arbitration between the parties, where the independent arbitrator selects one of the deals on offer. That selection would be binding on both parties.

Facebook was having none of it, with its managing director for Facebook Australia and New Zealand William Easton stating that the scheme “fundamentally misunderstands the relationship between our platform and publishers who use it to share news content.” Left with “a stark choice” – to either comply with the law drafted in ignorance of such realities, “or stop allowing news content on our services in Australia,” Facebook preferred the latter option. The main objective, then, was for Facebook to press the Australian government to abandon the code altogether or, what was more likely, soften the terms of its application.

On February 23, after a five day digital siege which saw outrage from numerous community, charity, media and political organisations across the country, Frydenberg announced that Facebook had “re-friended” Australia. He was resolute on the point that the amendments did not take away from the Code’s central features: it remained mandatory, was “world leading” and “based on a two way value exchange.” It retained a final offer arbitration mechanism. The Treasurer also thanked Facebook CEO Mark Zuckerberg for “the constructive nature of the discussions” and asserted that the object of this whole exercise was “to sustain public interest journalism in this country.” For a government that has encouraged the prosecution of whistleblowers and threatened the prosecution of journalists for engaging in that very journalism, dark ironies continue to bubble.

Facebook would have been softly chuckling at the amendments or “clarifications,” as Frydenberg preferred to call them. The joint press release from the Treasurer and Paul Fletcher, the Minister for Communications, outlines what can only be regarded as capitulations. Whether the digital platform in question will be designated by the Treasurer as one needing to cough up the appropriate remuneration will depend on whether it “has made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements with news media businesses.” At this writing, Facebook is doing that very thing.

The platform will receive notification by the government that it has been designated prior to any final decision, with a one month notice period. Non-differentiation provisions will not be triggered where commercial agreements yielded “different remuneration amounts or commercial outcomes that arose in the course of actual business practices.” The brutal market knows best.

Finally, resort to final offer arbitration will only take place as a matter of “last resort where commercial deals cannot be reached by requiring mediation, in good faith” after a period of two months.

Whether expressed in a fit of delusion or disingenuousness, the ministers also make the unsubstantiated claim that the amendments would “strengthen the hand of regional and small publishers in obtaining appropriate remuneration for the use of their content by the digital platforms.”

Sue Greenwood of York St. John University based in the UK argues that the opposite outcome is more likely, with the proposed law leaving “smaller or local news providers in a weaker position,” disadvantaged relative to those who “deliver content which gets more clicks and shares on Facebook,” thereby improving their negotiating position.

While the predatory practices of Big Tech are to be lamented and loathed, this Code is a sprawl of potential failings. It has puzzled and alarmed the inventor of the World Wide Web, Tim Berners-Lee for “breaching a fundamental principle of the web by requiring payment for linking between certain content online.” Gratis linking, “meaning without limitations regarding the content of the linked site and without monetary fees – is fundamental to how the web operates.”

It has induced much head scratching on the part of economists, not least because the Code seems to encourage failing industries and potentially benefit other media giants, such as Rupert Murdoch’s unsavoury News Corp. This is the unrepentant view of former Australian Prime Minister, Kevin Rudd. “The problem with the government’s current response to the challenges of the digital media marketing code is that it seeks to solve one problem … by enhancing the power of the existing monopoly – that’s Murdoch.”

The Code has also caused consternation to digital activists for not addressing privacy concerns. It does nothing to counter the concentration of information and relentless data extraction known as surveillance capitalism, defined by Shoshana Zuboff “as the unilateral claiming of private human experience as free raw material for translation into behavioural data.” That data is sold, in turn, to corporate players to target human behaviour in a predictive way.

The other digital giant no doubt doing a jig in light of these announcements will be Google, who, despite bullying threats to withdraw its search engine from the antipodes, preferred frenetic negotiations. To date, the company is boasting of striking deals with dozens of Australian media outlets as part of its News Showcase. It can already make a good argument for not being “designated” for contributing to the sustainability of the Australian news industry.

A victory, then, for the digital giants. A tail-between-the-legs capitulation from Canberra, and a single, dagger directed blow at the barely breathing body of Australian democracy. And just to add appropriately salted insult to wounding injury, Facebook promises that it may well do it again. The digital brutes have been emboldened.

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  1. Pete Petrass

    I would say that the worst treasurer in history, in his capitulation, has probably met the expectations of most Australians.

  2. A Commentaror

    Is there another multi national worth about $750,000,000,000 that procures the material (without payment) it utilises to draw consumers to its product?
    What a business model, no wonder it was objecting to disruption of it

  3. Phil Pryor

    A Commentator might consider the Roman Catholic Church, among many similar examples, utilising fear, greed, fantasy, dreams, images, fables, myths, inventions, rumours and legends, at the cost of three fifths of five eighths of sweet fanny adams, zilch, nada, blot. With their fellatio friendly mafia friends, they’ve done well, if only you could get a balance sheet. Then again, the Queen of the UK and extended family, friends, investors, professionals, all do quite well. What personal merit have Arab leaders, super bankers, royalty and nobility, lucky tech owner/discoverers?? At least Hollywood bought some land, sheds, plastic, celluloid, dumbarsed images. There’s money in the right type of smoke, shadows, illusions, mirages, “tales” and relentless lies.

  4. A Commentaror

    So you’re satisfied to have Facebook follow the unregulated path of royalty and the church.
    That’s not a particularly persuasive parallel for leaving Facebook to procure their material for free

  5. Matters Not

    One would think that the Treasurer, doing his day job, would have spent time developing legislation that would force these tech giants to pay significantly more tax. As an effective, non-taxpaying Citizen myself, at least in the net sense, I, as a voting Citizen, rely on companies, both multi-national and local, to pay their fair share as they are legally obliged to do.

    One of the great benefits of being a Citizen in a resource rich country such as Australia is to reap the benefits that should flow. But don’t. At least, not like they should.

    So why aren’t we pouring opprobrium on this Treasurer who clearly isn’t living up to his designated responsibilities and, is instead, moonlighting as a stand-over man for foreigners such as Murdoch? As a Treasurer, he is an imposter.

  6. Michael Taylor

    I think “procures” is a too strong a word.

    Facebook does not obtain by effort, unscrupulous or indirect means my decision to post a link to an article by, say, The New York Times. The NYT would no doubt appreciate that I am promoting one of their articles as they may in turn earn a few extra dollars from the visitors.

  7. Michael Taylor

    Indeed, MN, they should pay their fare share of tax, as should every person or every business.

    However, I’m battling to get my head around why the likes of Murdoch should be putting their paws in the Facebook honey pot.

  8. Matters Not

    MT – fair share will always be a contested concept. Always a moveable feast of sorts. Until then, perhaps those in charge (read Treasurer) could just enforce the existing law and its intentions (as outlined when the various legislative aspects were introduced) and if it’s found to be unenforceable, then make the appropriate amendments.

    In that regard, the current Treasurer is missing in action. And has been for some time with his eyes firmly fixed on a much bigger prize.

  9. A Commentaror

    I think it’s about right. But there may be other words more suitable.

    to get possession of (something) : to obtain (something) by particular care and effort

  10. Michael Taylor

    I’m not arguing over a word. You’re far smarter than I.

  11. A Commentaror

    And I’m sure there are even more points we would agree on, beyond that.

  12. Michael Taylor

    Nah, you’re too persistent for me.

    I’m happy for us to be on our merry way with differing opinions. No love lost.

  13. Andrew J. Smith

    Interesting to hear the government spin it’s way out of this hubristic overreach, leading to collateral damage of most other players, while claiming victory and world’s best practice….. as Chaser opined, two oligopolies facing off but the Australian end (inc. media) pretends otherwise.

    Clear example of an ‘owned’ government of a small/medium nation being put up to a stand over job or shakedown of BigTech, by foreign agents i.e. NewsCorp et al., but they were way out of their depth.

  14. Gangey1959

    So now Australia has “Gold Standard” legislation for the gathering and sharing of bazillions between the vastly overwealthy and under-deserving, while the overworked and underpaid go short. Again.
    As suggested by MN, instaed of endeavouring to enforce the titans of the web to play nice, just making them, and the other recalcitrants comply with Australia’s tax laws would be a great idea.
    It’s one thing for zuckerberger et al to challenge and threaten, and ultimately pull the pin because they can, because they don’t want to share their shekels with the sources of their income, but to do the same because they don’t want to pay their legitimate tax is a whole new story, and one that they cannot spin to their own viewpoint.
    This new legislation is “fools gold standard”. Our treasurer may be eyeing a bigger prize, as in the big chair, but with the charisma of a wet cagbbage, and being one of the “not quite us” brigade as far as the religious nutters are concerned, he has a fairly steep hill to climb already. He nearly didn’t get re-elected last time. Maybe he should give the game away and go for a sinecure job as an advisor on some committe as yet to be created that will see him through to retirement. Maybe looking after us oldies in our dotage with care and compassion, or taking over the future fund from one of his predecessors might work. Or he could throw himseelf under a bus for being an abject failure at life and awaste of oxygen. That works best for me.

  15. kampbell

    Wow, I was reading a limited news sight, and saw that it was great and resounding victory for the Aust Government… must have misread that…

  16. Michael Taylor

    It’s a bit of a worry that Facebook will allow the media organisations “they choose” to post on FB. I wouldn’t be surprised if Frydenberg wants the independent sites squeezed out.

    No, that’s not a conspiracy theory.

  17. Matters Not

    The best return on investment (ROI) you can ever get. Donate today!

  18. Michael Taylor

    Well, well well. We’re back on Facebook. 😀

  19. Geoff Andrews

    I was just reading a well credentialed commentator who opined:

    “If the big media companies didn’t want links to their stories to appear on Facebook, they could have removed the pages they have built on that platform.”

    Is this how it works? Facebook provides a platform, a vehicle, on which anyone, from John Citizen to New York Times, can voluntarily ride and basically post what they like?

    Or does Facebook have an algorithm or a room full of people furiously cutting and pasting, without permission, news from the world’s newspapers & TV channels? If this was the case, I’m sure we would have seen some ripper copyright cases by now.. Therefore, if one can dismiss this option, the necessity for the legislation disappears unless the government wants to get someone else to throw a lazy billion to Murdoch every year.

    Getting Facebook & Google to pay tax on theirs earnings from doing business in Australia is another and more pressing matter.

  20. Kaye Lee


    I feel likewise. I don’t understand this legislation. As you say, news organisations don’t HAVE to have a facebook page which is provided to them for free. But looking at today’s views for the AIMN, our reinstatement on facebook brings more readers.

    Jacquie Lambie agrees the companies should just pay tax and then the government directly subsidise journalism. rather than handing more money over to the big media companies.

  21. Matters Not

    What’s it all about?

    NEWSCorp Media Code was just a bargaining chip. My never be called upon.

  22. Matters Not

    Everyone’s a winner.

    Whether or not the bargaining code is ever used, the government got what it wanted: a large sum of money flowing from platforms to news publishers.

    It’s the threat of the code that forced tech companies to negotiate, Dr Meese said.

    “Facebook finally realised that the government’s intention here was never to use the code the way it was written. …

    Facebook, Google, the Australian government and news businesses all emerge from the recent events as winners, Dr Meese said.

    The LNP government is paying protection money – again. As for the citizens – it matters not!

  23. Kaye Lee

    I rarely look at youtube clips, I am more a ‘read it’ kinda person, but I looked at the one you linked to at 1:37 MN.

    Yup, that sums up my feelings nicely. The fact that “Rupert and Lachlan Murdoch have been fighting for this for years” made it immediately sus.

  24. Kaye Lee

    From the ABC article….

    “Rupert Murdoch is the biggest winner here,” Professor Leaver said.

    “He’s already paywalled most of his sites. Now he gets money for linking to things that people can’t read without a subscription.

    “Without his political clout, we wouldn’t have a bargaining code.”


    Taxpayers paid twice to fund the broadcasting of women’s soccer games after the ABC bought rights from Foxtel, which was the recipient of a controversial $10 million government subsidy to support the sport’s coverage.

    The July grant to Foxtel came as part of the government’s COVID-19 response fiscal stimulus measures. It was an extension of a previous $30 million given to the News Corp-owned broadcaster in 2017 to support broadcasting of under-represented sports on subscription television.

  25. Michael Taylor

    Even though we were able to share on Facebook (thanks to one of our readers writing a code that bypassed the ban), the posts weren’t public on our Facebook page and it affected our traffic severely.

    A couple of days ago FB must have caught on to what we were doing and blocked us from posting to our FB site. Not to worry – I put them on the Cafe Whispers page (with the code added) and shared the posts from there.

    But it’s great to have our FB page running again. It’s such a relief.

    FB is one of those necessary evils for any publisher. Love them or hate them, they’re the biggest driver of traffic for independent publishers.

  26. Geoff Andrews

    Michael & Kay,
    I’m a fossil from the pre-babyboomer geological era so I don’t use Facebook to get onto the AIMN site. In fact I don’t use Facebook to do anything except look at friends & relos’ Great Grandchildren an’ their cats an’ things as well as a suburban group I’m in – (“Keep a lookout for white utility FRX325 – it’s acting suspiciously”) and sometimes I get sucked into an interesting video..

    I infer from Michael’s 3.29pm posting, is that is the correct term, that it is to the AIMN’s advantage that Facebook doesn’t unfriend you? Or, taking that inference a little further that you may even be tempted if asked to pay Facebook a little money, say, $20/year because of the extra numbers?

    Do you think that when Facebook blocked the SMH recently, the Editor would have noticed a falling off of interest, as you did, and that therefore under the irrefutable laws of a free market, supply & demand and all that, the SMH should be paying Facebook?

    What “ism” denies the free market? Fascism or socialism or ……. just thinkin’ aloud.

  27. Michael Taylor

    Geoff, not a big Facebook user on a personal level, only using it on the dozens of political pages who share AIMN articles, for which we are most grateful.

    We don’t make any money from FB, and they ask for no money from us. One time a few years ago they tempted me to part with $13 for them to put one of our articles in 1,000 news feeds, but as we don’t even make $13 per article (from the ads on this site) I soon saw that it was a backwards move.

    A few days ago – ironically, as it was during their ban – they tried to entice me to put ads on The AIMN’s FB page (as we qualified, apparently, because we have more than 20,000 members). Hmm, I might look into that, though I imagine they’d come out the winners in that deal.

  28. Geoff Andrews

    Please delete this post if the above site is a deadly rival to AIMN or you feel it is offensive (they DO use very naughty words!)
    For me, the site is just as compulsive reading as AIMN is.

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