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The battle with publishers and regulators around the world over how the social media giant handles news is far from over after a deal struck this week with the Australian government to pay for content.
Facebook’s deal with the Australian government on Tuesday to restore news content to its platform comes as political leaders pledged to tighten control over tech giants and the media also plans to step up pressure on the company to enter into agreements. The question also raises questions about which publishers should be paid for news content and how much.
Facebook’s deal with Australia allows it to avoid mandatory payments to publishers for news content, as long as the company works to make deals with publishers on its own.
“We appreciate that the government has created flexibility to move forward in making deals with publishers, while giving us 30 days’ notice before a designation,” said Campbell Brown, Facebook vice president of partnerships. global news. If Facebook’s negotiations with individual Australian publishers do not satisfy the government, the company could reimpose its ban on publishing information rather than being forced to comply with the terms of the new law for fixing payments.
“I hope this step will not be necessary,” Ms. Brown said.
The compromise as envisioned would be an alternative to the voluntary payments Facebook has made to “partner” news outlets for its News Tab product for mobile users in the United States and other countries.
The payments Facebook has made to date aren’t too costly for the company, whose advertising business drove it to a record $ 86 billion in revenue last year. News content is only 4% of what people see in their main news feed, Facebook said when it announced it would be removing news from the platform in Australia last week.
News publishers rely on audience as Facebook and Alphabet Inc. of
Google delivers. In the hours following Facebook’s decision to turn off news sharing in Australia, the country’s news editors saw traffic to readers outside of Australia decline by around 20%, company data shows. Chartbeat analysis.
According to a fall 2020 study from Pew Research, about 36% of Americans get their news from Facebook, compared to 23% who get it from Alphabet’s YouTube and 15% from Twitter..
If Facebook were to pay for news content globally, the cost would be significant, said Eric Ross, analyst at Cascend Securities. “Margins disappear when you suddenly have to pay for free things,” he said.
Finally, there is a much better appreciation of the value of credible journalism.
The hubbub between Facebook and Australian news providers comes as Google faces antitrust lawsuits in the United States and regulatory scrutiny elsewhere. Australia and other countries that demand payment for news content on behalf of publishers say Facebook is abusing its market power by trying to minimize or avoid such spending. A 2019 Australian report estimated that large platforms threaten budding social media businesses as well as advertisers and the news industry in general.
Facebook and Google say their platforms help journalism. As Facebook itself noted, publishers around the world are already looking to maximize the attention their work receives on social media without any promise of compensation.
A US news editor said the Facebook dispute in Australia suggested the social media company had renewed its interest in paying publishers after previously hesitating to do so.
“We’re at a tipping point,” said Maribel Perez Wadsworth, editor of USA Today, Gannett’s flagship title. Co.
, the largest newspaper chain in the United States. “There is finally a much better appreciation of the value of credible journalism.”
USA Today participates in offering the Facebook News tab in the United States through a license agreement.
owner of The Wall Street Journal, has a business deal to provide information through Facebook. Last week, the company entered into a three-year agreement with Google to license the content of its publication and produce new products for Google platforms.
Australia’s efforts could prompt non-traditional media outlets, such as freelance journalists who publish articles on writing platforms like Medium, to demand payments, Bernstein analyst Mark Shmulik said. “The problem is, what if we don’t deal with media conglomerates anymore? … It’s a path that Facebook doesn’t want to take, ”he said.
Earlier this month, Australian officials spoke with their counterparts in Canada, Germany, France and Finland about those countries setting similar rules on tech platforms paying news publishers, Steven Guilbeault said. , Canadian Minister for Cultural Policy, adding that the coalition of countries could expand. overtime.
Guilbeault said he was encouraged by developments in Australia and intends to introduce measures this spring that have the support of his global allies and relevant stakeholders. On Monday, Canadian Prime Minister Justin Trudeau spoke with his Australian counterpart, Scott Morrison, about potential cooperation in further regulating online platforms, according to a summary of the conversation released by Trudeau’s office.
“We must find a lasting solution for publishers of news, large and small digital platforms, and for the health of our democracy,” said Mr. Guilbeault.
The battle over payments to news organizations has simmered – and at times boiled over – in Europe for more than a decade. A new European Union copyright law passed in 2019 and the involvement of antitrust regulators gave the media new leverage, among other things, by creating a new copyright control for organs reports on the use of their publications on the Internet by technology companies, except in the case of very short extracts and hyperlinks.
In France, the only country to have implemented European legislation so far, Google signed licensing agreements for its News Showcase product last November with several publications, including Le Monde. The deals came after a French court reaffirmed an order from the country’s antitrust regulator that Google must negotiate.
Google said it has signed News Showcase agreements with more than 500 publications in a dozen countries, including Germany, the United Kingdom and Australia. Google pledged $ 1 billion over three years for such licensing deals last October, but declined to say Tuesday how much of that has been spent.
“We have hundreds of partnerships with news publishers large and small, which makes us one of the biggest funders of journalism,” a Google spokesperson said.
Facebook has stated that the publication by posts of their articles on its platform constitutes a license under French law, and remains unchanged. The company currently only displays links, rather than rich previews, when users themselves post news articles from French publications, unless the post has given Facebook explicit permission.
A Facebook spokesperson said the company was in talks in France and Germany to launch its Facebook News product, which pays to license articles from the media. The product was launched last month in the UK with articles from publications including The Guardian.
Facebook has previously claimed to have provided hundreds of millions of dollars to posts through its various advertising and subscription tools.
—Sam Schechner and Paul Vieira contributed to this article.
Write to Jeff Horwitz at Jeff.Horwitz@wsj.com and Sarah E. Needleman at firstname.lastname@example.org
Corrections and amplifications
Facebook generated record revenue of $ 86 billion last year. An earlier version of this article incorrectly said that Facebook generated $ 70.7 billion in revenue. (Corrected February 23)
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