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ANGE:

From Schwartz Media I’m Ange McCormack - this is 7am

Three years ago, Australia became the first nation in the world to make Facebook pay for news. Now, those deals are about to expire and Facebook isn’t renewing them.

That leaves Australia’s world-first deal hanging by a thread, and if the conflict escalates, it could even lead to Facebook and its other products, Instagram and WhatsApp for example, pulling out of the Australian market completely.

Today, contributor to The Saturday Paper and author of Media Unmade: Australian Media’s Most Disruptive Decade Tim Burrowes, on why the world is watching Mark Zuckerberg’s fight with the Australian media and government.

It’s Thursday, April 11.

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ANGE:

I think people will be kind of familiar with the evolution of social media content, so to speak, over the past few years and might have noticed that increasingly, their feed is filled with kind of random content, random stuff. A lot of it isn't actually news anymore. I'm wondering, to start off with, if you can talk to me about how our feeds got like this, exactly?

TIM:

One of the things that sometimes you don't appreciate is that social media, as we know it now, has been around for less than two decades. The moment where the world really changed was when Facebook and Mark Zuckerberg invented what was then known as the News Feed.

Audio Excerpt – Mark Zuckerberg:

“There is always more to build, there is always a next chapter to the story. And for us, that's a story that started in a dorm room and grew beyond anything we could imagine.”

TIM:

Until then, we'd actually been quite used to having every social media site we looked at being very uniform. Whereas the genius of creating the news feed was that everybody got their own tailored, algorithmically-driven message about what their friends were up to. That was the starting point.

Audio Excerpt – Mark Zuckerberg:

“Hello everyone, we are live from my backyard where I am smoking some brisket and some ribs and getting ready for the presidential debate tonight. So the thing about smoking meat is….”

TIM:

But then quite quickly became fuelled by news brands, news content. Because of course, there was lots of it. The publishers were encouraged to lean into it and I think Mark Zuckerberg has been something of a pendulum, really, in how he's behaved towards news.

Audio Excerpt – Mark Zuckerberg:

“Research from the Reuters Institute also shows that people who get their news online have much more diverse media diets and are exposed to a much broader range of content than people who don't.”

TIM:

There were lots of promises and support for media companies. You know, they were helped in the tricks of the trade in going viral, and they were really encouraged to share their content on the platform.

Audio Excerpt – Mark Zuckerberg:

“We believe, really deeply, that if people are sharing more then the world would be a more open place where people could understand what's going on with the people around them. And that's really what we want to get towards.”

TIM:

And what has sort of happened over time is for a while, I think a lot of creators of news viewed, not just Facebook, it was predominantly Facebook, they viewed it as a kind of benevolent force, a source of traffic. And they came to rely on it more and more. And no matter how many times people say about publishing, you're building on somebody else's land. So of course, when you're only kind of renting that space, it could be taken away from you. And that began to happen more than once. You'd see some sort of change to the algorithm, and then suddenly traffic would just drop. And, for the publishers who relied on advertising for their main source of revenue, which, you know, has really been the biggest story of digital media, that would have a big effect each time. So we’ve seen this sort of reliance, but also, I suppose, a kind of increasing distrust from the traditional media of what might happen next from Facebook. And at the same time, this sort of resentment that they've ended up relying on them and really having helped build the platform themselves by providing that content and that engagement

ANGE:

Right so, news organisations find themselves reliant on facebook but also frustrated they’re not getting rewarded for their content. How did they try to resolve that?

TIM:

Yeah so, you can look right back to an interview that Rupert Murdoch gave to Sky News Australia more than a decade ago.

Audio Excerpt – David Speers:

“Our guest today is the world’s most powerful media owner, the chairman and chief executive of News Corporation, Rupert Murdoch”

TIM:

When he was kind of asked about how he felt about the publishers, he described them as stealing content.

Audio Excerpt – David Speers:

“You’ve been particularly critical of what you call the content kleptomaniacs and the plagiarists, are you particularly talking about Google here?”

Audio Excerpt – Rupert Murdoch:

“Well the people who simply pick up everything and run with it and steal our stories - we say they steal our stories, they just take them.”

TIM:

One of the things about Rupert Murdoch and the power that being the proprietor of News Corp gave was it provided him with the sort of heft with ambitious politicians that maybe they look to try and keep him happy. When Scott Morrison became treasurer, he began to work with the ACCC to begin this long running inquiry

Audio Excerpt – Josh Frydenberg:

“There was an unequal bargaining position between the digital platforms and our traditional news businesses. That review also found that they were operating in a highly concentrated market.”

TIM:

And then it went further. It proposed a mechanism as a solution, the news media bargaining code.

Audio Excerpt –Josh Frydenberg:

“The recommendation of the ACCC was that the government put in place a bargaining code between the parties, a voluntary bargaining code”

TIM:

And what the code effectively said was, if you were a news platform and recognised that way by the government then you could knock on the door of a designated platform and you could say we would now like to negotiate how much money you're going to give us for for using our content to service your audiences.

Audio Excerpt –Josh Frydenberg:

“And the government accepted that recommendation and Paul, the Prime Minister and I announced that that was our policy position “

TIM:

Designation was really created just to be a big stick to be held over the big platforms. And at the time Google went along with it. Facebook resisted at first, it briefly took news off the platform, and for 5 or 6 days Australia was unfriended by Facebook and there was just no news on the platforms.

Audio Excerpt – News Reader:

“This is what Australians woke up to. Empty newsfeeds on their Facebook pages after the platform blocked all local and international media outlets, a dramatic escalation in a continued dispute with the government over paying for news content.”

TIM:

By then, Scott Morrison had become Prime Minister, Josh Frydenberg as the treasurer was involved as well, and they managed to come to an accommodation. Facebook would find ways of giving money to the publishers and it began to sign three year deals and it's those three year deals that are just about to expire.

ANGE:

And what does those deals expiring mean for news in Australia right now? And I guess, how worried are news organisations about being up against, you know, the biggest social media company in the world?

TIM:

The deals have been really good, particularly for the big publishers who got some of the money. So, because all of those arrangements were confidential, nobody quite knew exactly how much but credible estimates seem to be around $200 million a year going into the local news providers, most of the money from Google, some of the money from Facebook, or now the parent company Alphabet and Meta. But, over the three years since we've seen Facebook getting ready not to have to do the deal again. Because both Google and Facebook, they, they hate the kind of global precedent that they might be made to pay publishers around the world for the right to link. So, in recent weeks they've announced that actually they're going to close down the Facebook news feed. Facebook says a tiny amount of people get their news from Facebook now, research by the Australian government has suggested otherwise.

We’re now at this strange kind of position of waiting where Facebook has said it's getting rid of the news feed, it's not going to renew those deals. So the ball now goes back into the court of the Australian government and have to decide whether it is now time to designate Facebook.

ANGE:

After the break, what would designation mean for Facebook and news in Australia?

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ANGE:

So Tim, the news tab is shut down on Facebook. Meta isn't giving media publishers in Australia any more money. Where does that leave the industry in Australia broadly, and who's going to be the most impacted?

TIM:

Yeah, the news industry now in Australia is really quite divided. Some of the biggest players, most of them, would now like to see Facebook designated by the government. So they have to come and negotiate. That creates alarm for some of the small publishers, particularly the ones who never had any of the Facebook money in the first place. Because if that happens, if it's going to have to negotiate about what the news is worth, then the thinking would be, if it's not got the news on the platform, there's no value, so why should it pay? That creates a big dilemma for the government. And it's Stephen Jones, the assistant treasurer in particular, who has to decide what to do next.

Audio Excerpt – Stephen Jones:

“We’re deeply disappointed and we've advised all of the publishers today that the government will be taking all of the steps available to it under the news media bargaining code”

TIM:

Right now, the ACCC has been gathering information from publishers. It will then present that information to Stephen Jones. He will have to decide whether to make that designation or not.

ANGE:

And Tim, trustworthiness in news is really important and I'm wondering if this development risks the integrity of journalism in any way or how informative it might be, because if the existing media bargaining code was meant to sort of protect news in the digital age, I guess, where does this development leave that protection?

TIM:

W've got so many reasons to worry about the quality of the information that the public get. You know, news media as a business has been under pressure like never before. So you have that as the backdrop, but then to have traditional or credible news publishers removed from the platform creates a void. It creates a vacuum which will be filled with something else. Now, probably the best example we've got so far of what that might look like is in Canada, where Canada created something really based on the news media bargaining code, and for a time saw both Google and Facebook remove news from the platform.

Audio Excerpt – News reader:

“If you're an affected user, you won't be able to share news articles or even see them, nor can you access the pages of media outlets. They can continue to post, but some of it won't be viewable in Canada.’

TIM:

We saw disinformation videos, just wrong information, being widely shared.

Audio Excerpt – News reader:

“Media experts are concerned the ban fuels the spread of misinformation, and could strand key information while the country is facing devastating wildfires.”

TIM:

I think globally ,everybody is watching with a great deal of interest. It's a battle of wills, really, between Facebook and the Australian government. And the winner will be watched very carefully around the world. And that probably is what makes it such high stakes for Australia, because it's very hard to picture something where a quiet accommodation is found when the rest of the world is watching.

ANGE:

And, I guess if the tech companies or the government don't get this right, if the balance isn't struck exactly, what happens, what's the risk that we're facing here?

TIM:

This will unfold over, probably not even weeks, it'll be months. if you want the absolute ultimate consequence, we could see a really different environment at the end of it. Imagine an environment where Meta pulls out, so all of a sudden we have no Facebook, we have no Instagram, no Threads, no WhatsApp. And then if you really want to kind of look at the unlikely but possible scenarios, we also see in the US, the federal government in the US, really having a growing problem with TikTok, which we may see a point where ByteDance, the Chinese owners of TikTok, have the choice of divesting the company to a US owner or being effectively locked out of the US, and I'm sure Australia would soon follow if so.

There's a very small possibility that we might suddenly have a world without Facebook and a world without TikTok, which would be a dream for some of the traditional publishers.

ANGE:

I think also for some people listening, they might have mixed feelings about, you know, the influence of social media on their lives. But it is a really fascinating and really consequential development that we have on our hands. But Tim, thank you so much for speaking with me today.

TIM:

An absolute pleasure.

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ANGE:

Also in the news today…

Tasmania will form a Liberal minority government, after the party secured a deal with the Jacqui Lambie Network.

The Liberal party won the most seats in the recent state election after ten years in government, but failed to win an outright majority.

And,

The amount of new homes beginning construction has fallen to an 11-year low.

The latest data, released by the Bureau of Statistics, was highlighted by Master Builders Australia – a construction industry lobby group – which said the data revealed that despite state and federal plans to build new homes, there was a long way to go to increase supply.

I’m Ange McCormack, this is 7am. Thanks so much for listening, we'll be back again tomorrow.

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