Adam Morton of UM: what the Facebook/Australia stand-off means for media

“Facebook hit the nuclear option with devastating impacts for everyday Australians..” That’s how reported Facebook blocking news on its platform today. Clearly, they have a vested interest in the situation. However, there is no doubt Facebook’s move in response to the ACCC News Media Bargaining Code is a significant day for media down under, and potentially the globe.

It’s an evolving situation that after much posturing, has taken a rapid turn. While a complicated issue, with differing viewpoints and wider ramifications, much is down to the perceived value exchange between Facebook and publishers.

Facebook believe arrangements are already weighted in favour of the publishers, with the ACCC code exacerbating the issue. News brands clearly have the opposite view, with Michael Miller, Executive Chairman of News Corp stating, “This code has the potential to benefit all Australians by securing the future for the people and companies who serve real communities with real news.”

The latest development however is not the publicly desired outcome of any party involved; including the Australian Government, given the direction initially given for all parties to reach an agreement. The removal of news content from Facebook will result in publishers (especially smaller outlets) suffering a loss in revenue, while Facebook lose a source of quality content. While Google, who also opposed the law, have now agreed to pay the News Corp for content used across its network. This creates a less dynamic Facebook environment for its consumers and potentially further strengthens Google’s position in the Australian market.

Facebook are unrepentant, while Prime Minister Scott Morrison labelled them as arrogant.

As of today, there remains a lot of uncertainty around the future of accessing news in Australia and what, if any implications this will have on the spread and consumption of disinformation. Will Facebook create its own news offering, how will Google’s showcase evolve and monetize for advertisers, how will small publishers change their operating models to decrease reliance on social platforms? These are just some of the questions that we will see answered in the coming weeks, while this morning Australia Treasurer, Josh Frydenberg, tweeted that he had a constructive conversation with Zuckerberg.

Australia is not a huge market for Facebook, and they are most likely concerned about the principle and precedent it might set.

Facebook have publicly declared that this was a last resort and is not their preferred solution, so it remains to be seen whether this will be the enduring position, or whether a resolution will be reached.

Adam Morton is managing partner of client services at UM.

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