Technology Feb 26

Facebook switches news back on for Australians after content deal

US social media behemoth follows Google in agreeing to negotiate editorial use contracts with local media, leading the government to dilute proposed arbitration requirements

Facebook switches news back on for Australians after content deal
US social media giant Facebook, which relies less on news in its business model than Google, responded to the Australian legislation on February 18 by blocking access to news for all its users in that country. File photo illustration by Reuters.

(ATF) Facebook on February 26 restored access to news for its Australian users after a week-long hiatus as it reached agreement with the government on complying with a landmark law requiring tech firms to pay for editorial content.

The US social media giant's Australian readers were able to read news from media outlets for the first time since it slapped a ban on news content.

Facebook and Google, the two companies targeted by the regulation, strongly objected to clauses requiring them to submit to mandatory arbitration over the amount they would have to pay local media to show Australian news on their platforms and search results.

Google negotiated multi-million dollar content licensing deals with a host of Australian companies, and notably the country's two biggest news organisations: Rupert Murdoch's News Corp and Nine Entertainment.

Facebook, which relies less on news in its business model, responded on February 18 by blocking access to Australian news for all its users. The move also hit many non-media Facebook pages, including for government emergency services, health organisations and charities, prompting widespread outrage. 

PAID ARRANGEMENTS

Facebook eventually followed Google in agreeing to negotiate paid arrangements with Australian media, leading the government to water down the arbitration requirements in the News Media Bargaining Code. The company also announced deals with three independent companies, Private Media, Schwartz Media and Solstice Media. 

Facebook and Google have each said they will invest around US$1 billion in news around the world over the next three years.

Analysts say Facebook will struggle to regain trust after the unilaterally imposed blackout. "Facebook’s response late last week ... to impose a news blackout of both local and international media in Australia [was] a public relations disaster," Christopher Wood, global head of equity strategy at Jefferies, said. 

"The rise of both Facebook and Google has destroyed the economics of traditional media by their ruthless exploitation of surveillance capitalism, a business model which should have long since been banned by regulators," Wood said.

Google will pay for news content that appears on its "Showcase" product and Facebook is expected to pay providers who appear on its "News" feature, which is to be rolled out in Australia later this year.

With reporting by Agence France-Presse and Reuters

ALSO SEE:

Google, Facebook negotiating deals to compensate Aussie media

EU poised to pounce next as Facebook's Aussie news spat rolls on

Facebook ratchets up fight with Australia over news payments

Australia Facebook Google media regulation