Facebook’s decision on Thursday to block users in Australia from posting links to news content took the world by surprise. Faced with abiding by a new Australian law that forces Google and Facebook to bargain with media companies for a slice of the revenue generated by advertising on the platforms, each company has taken a wildly different direction.
While its advertising competitor Google has cut deals with the country’s media giants, Facebook has decided to play hardball—blocking news entirely—and to send a warning to other countries that might be thinking of similar legislation.
Supporters of the new code say it’s a necessary step toward addressing the growing imbalances in the market for digital ads: Roughly 70 percent of the $6.8 billion per year Australian online ad market is currently cornered by Google and Facebook. Google threatened to leave Australia over the law before reneging, but Facebook has held firm. In the social media giant’s view, news is only a small part of what appears on users’ feeds, and publishers largely reap the benefits by gaining access to Facebook’s audience. About 70 percent of Australians use the platform.
Foreign Policy spoke with Lisa Davies, the editor of the Sydney Morning Herald, Australia’s most widely read newspaper. It’s also a part of Nine Entertainment, a media group that has been influential in pushing for the new laws. She spoke about the surprise move and the wider impact of the government’s new media code.
Foreign Policy: How shocked were you to wake up on Thursday and find Facebook had blocked your page?
Lisa Davies: Pretty shocked! And I am not seeing reaction that’s hugely positive. I can’t see people thinking it was a smart move on Facebook’s part.
Still, we firmly believe this was the wrong call, and Facebook’s failings have led to this. What I have said in my public comments is: Where does this leave consumers? It leaves them facing a world in which it’s much harder for readers to get access to quality journalism that is unbiased and fearless. Instead, they’ve exponentially increased the opportunity for misinformation, conspiracy theories, and fake news. That’s all you’ll be able to see—and I think that’s really dangerous.
And what happened today was a PR disaster for them. They also took down a whole load of really important public sites like pages from health departments, fire and rescue, even the Bureau of Meteorology. I think it’s one thing to stop people being able to read the Sydney Morning Herald—it’s another to stop them looking up their local fire brigade.
FP: Facebook says the current system ultimately benefits publishers—that media companies get more out of Facebook than Facebook gets out of the media companies. Has that been your newspaper’s experience?
LD: I think it’s pretty clear when the flow of advertising over the last decade [has gone] toward the big tech companies … yet it’s our content those people want to advertise, [that it] means the playing field is severely tilted against us.
Media outlets around the world continue to grapple with the digital shift—those rivers of gold that sustained the media business are no more. The business models in which we strive to provide quality independent news from the Sydney Morning Herald have become increasingly hard.
Our company has been through a period of stability in the last four years or so, but prior to that it was year on year of cost-cutting to keep ahead of that flow of advertising money that now just doesn’t support our journalism. So something had to be done.
FP: How has the move impacted traffic to your sites?
LD: I don’t think it will have a hugely detrimental impact on our traffic—over the last four years we’ve pivoted to a much more focused subscriber model. And we certainly haven’t noticed a dip today [after the change at Facebook]. In fact, we had a huge amount of readers flocking to the site to read about this, which is great.
FP: So what happens next? Should we expect a climbdown?
LD: It’ll be really interesting to see how it plays out. The language from our prime minister and also the treasurer is still very firm—they’ve said they do believe that what they’re doing is the right course. Our treasurer has spoken to Mark Zuckerberg. They’ve had those conversations.
For Facebook to do what they’ve done seems to me pretty final, and I guess time will tell. The code is legislated now, but if they don’t have any advertising revenues from news then they won’t have to share it. What that does to their bottom line and their reputation will be up to them. From our perspective, of course, it’s disappointing.
We have the view, like so many hybrid print and digital companies, that of course we have our paying subscribers. They are our focus. But we need people to be continually exposed to our content, and Facebook has always been one of those platforms that exposes people to us. But I think people will continue to want trusted media companies to follow the issues and hold democracy to account. So hopefully it even further proves the point that you get what you pay for. You don’t pay for anything on Facebook. So maybe it forces people to make that calculation.
FP: How do you think this is going to affect how Australians view Facebook?
LD: I’m far from an arbiter of what a global tech giant’s actions mean, but from what I have seen, the public’s reaction has not been good for them.
I think the time people spend on that platform will be significantly decreased. Without different content to consume between the cat videos and the birthdays, maybe they’ll go somewhere else.