Facebook and Google have comfortably amassed market power despite calls for regulation and heightened public scrutiny. Though criticisms of both platforms’ monopolizing influence were not previously uncommon, the staged coup at the Capitol marked a watershed moment where the public and federal eye stared down Big Tech. A reckoning of these platforms’ catastrophic capabilities if they remained unchecked swiftly followed. The hasty shutdown of former President Donald Trump’s Facebook and Twitter accounts point towards an acknowledgment from both companies that their services were somehow, if not overwhelmingly, complicit in the violence of Jan. 6. Unimpressed critics, however, argued that these efforts were merely after-the-fact actions that held little promise of due change.
Now, the two companies face a new challenge from Australian lawmakers and publishers that reorients the conversation about vying company and governmental interests in regulating Big Tech. The months-long tension originated from a proposed law from the Australian Competition and Consumer Commission that requires Facebook and Google to pay news organizations for original content shown on their platforms. The law, recently passed by Parliament, answers growing complaints from news companies that they are not fairly compensated for their content and the consequent ad revenue that both Big Tech and the social media industry enjoy.
The decision suggests the beginnings of a revitalized journalism industry. Big Tech and social media have been absorbing much of a spotlight that used to shine unilaterally on the news industry. Candy-colored apps dominate over physical newspapers, resulting in multiple financial setbacks for even America’s largest publications. More concerning is that despite their awareness of misinformation, approximately 53% of U.S. adults get their news from social media “often” or “sometimes.” In a status quo where journalism is becoming increasingly digitized, and readers have begun relying heavily on what the Internet makes available, it has become a herculean task for newsrooms to remain financially afloat. Ben Mathis-Lilley, a senior writer at Slate, argued that’s because “such a huge share of advertising spending is sucked up by Facebook and Google, with what’s left increasingly going to Amazon.”
Though the passing of the law — newly titled the News Media and Digital Platforms Mandatory Bargaining Code — was accomplished through a compromise between Australian lawmakers, Google, and Facebook, the two companies’ initial responses were markedly disparate. Facebook had a notably larger role in the compromise. Yet despite Google’s initial pushback, the company soon agreed to follow Parliament’s terms, whereas Facebook’s immediate response was to block news in Australia for five days, triggering intense criticism both domestically and overseas.
Nancy Scola, a senior technology reporter for Politico Pro, argued that Facebook’s refusal to comply justifies governments and news organizations to push their regulatory agendas harder than ever before. She described the company’s actions as “instant fodder for those in the U.S. who say Facebook is too big, too powerful and verging on ungovernable.” Those very concerns prompted an antitrust suit against the company late last year.
Following the law’s initial proposal, Google also threatened to hypothetically shut down its services. But its cooperative actions in real-time contrasted with its social networking counterpart. Even more assuaging than Google was Microsoft. Brad Smith, the company’s president, even penned a blog post that officially endorsed Australia’s proposal, highlighting technology’s ability to be one of society’s most powerful double-edged swords.
The continued world-wide agitation for increased regulation and accountability foreshadows a disruption to current governmental inaction over Big Tech’s growing socio-political influence. If anything, foreign countries have demonstrated heightened leadership when it comes to tech regulation than their American counterpart, with Australian Prime Minister Scott Morrison leading the global charge. Morrison even took to his personal Facebook account to express his distaste over the company’s response to the proposed law, writing, “Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing.” Morrison also wrote that he was in “regular contact with leaders of other nations on these issues,” suggesting a newfound, globalized effort to successfully regulate Big Tech.
The initial disparate responses of Facebook and Google mark a curious divergence in a long history of parallels. Though both companies remained relatively steadfast in their own defense, the forked road signified that tensions between Big Tech and the government have reached a boiling point. Now, digital giants have little choice but to work with governmental authority, although they may still be able to exercise significant influence over the end result. This is evidenced by how following Facebook’s initial refusal to comply with the Australian government’s rules, it later bargained for the law to make several significant undercuts — concluding in an eventual compromise with lawmakers.
Such developments may foreshadow a reorienting power dynamic between popular digital platforms and news organizations, allowing publications to receive due compensation for their content rather than enabling Big Tech and social media to reap the benefits. As Joe McDonald of AP News argued, recent events “suggest the financial balance between multi-billion-dollar internet companies and news organizations might be shifting.”
A clear winner from gov-tech confrontation is media mogul Rupert Murdoch’s News Corp, which recently confirmed that it would be offering up its news content in return for “significant payments.” Robert Thompson, the chief executive of News Corporation, also expressed his approval at Google’s compliance, and highlighted that the “terms of trade” would be changing “not just for News Corp, but for every publisher.” Despite Thompson’s alleged optimism for the equity of such developments, however, it would be remiss not to mention that News Corporation — owning both the Wall Street Journal and the Times — is anything but reflective of many of the smaller, less powerful publications that suffer the brunt of a rapidly shifting news consumer base.
To this end, it is critical to recognize the persistent ambiguity of what Google and Facebook’s actions yield. Even if Google’s agreement invites large sums of cash into the hands of news organizations, it remains unclear exactly who would benefit from such a transaction. After all, most major news organizations consist of complex hierarchies of journalists and executives alike. Independent Australian Senator Rex Patrick described the law’s consequences as enabling the “big players” to “successfully negotiate with Facebook and Google,” resulting in “all the little players [missing] out.”
President of the Media, Entertainment and Arts Alliance Marcus Storm similarly underscored the necessity of “pressing the case for transparency” on precisely how the funds were distributed, asserting that “any monies from these deals need to end up in the newsroom, not the boardroom.” Such realities are a stark reminder that though Australia’s law marks a critical legislative step towards international technological accountability, due compensation for diverse news platforms is more difficult to actualize than towering executives may be willing to admit.
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