Facebook deal leaves questions unanswered

Facebook deal leaves questions unanswered

The amendments could pass through Parliament as soon as Wednesday.

Following the amendment, the principle that governs whether a platform falls foul of the law now “must take into account whether a digital platform has made a significant contribution to the sustainability of the Australian news industry”.

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If the government decides in future that Facebook isn’t making enough of a contribution and tries to clobber it, then Facebook retains the right to pull the news, as it has just so controversially done, and we will be back to square one.

So in other words the value of news has still not been sorted out.

Both sides suggest they are the ones being exploited. Facebook says it will resist “media conglomerates that do not take account of the true value exchange between publishers and platforms like Facebook”.

That very response gives the lie to where the power in the relationship is: in essence the platform is telling news outlets “your news is a tiny drop in our massive ocean, so be grateful for the clicks and traffic we send you”. To get a flavour of how Australian media feel about this, it is worth quoting from a recent oped in the Sydney Morning Herald: “The argument that ‘platforms give publishers clicks’ is the same as [a] friend offering to give you a lift in your own car… it’s outrageous.”

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Given that there is no clear winner today, then, who wins tomorrow?

In the narrow case, medium term, Facebook looks strengthened. It can cut deals to ensure the new law never applies to it, picking off media resistance outlet by outlet.

In the bigger picture longer term, however, this whole episode looks like a massive own goal for a social media company which has a history of scoring them.

The Cambridge Analytica saga was one; the recent update of WhatsApp’s terms and conditions – so that information about the way the messaging app is used for shopping will now be shared (outside the EU and UK) with Facebook – may turn out to be another.

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The company’s gamble is always the same: most people will not pay much attention to precisely how it makes money from their user data, as long as its service is good enough – and content is a key part of that service. Sometimes that gamble backfires spectacularly. But generally it has paid off handsomely.

Yet it is also why long term the Australian deal could be costly for Facebook. The kerfuffle has focused a huge amount of attention on who gets most out of the deals the company strikes for content, not just from news sites, but from everywhere: from governments, businesses and ultimately from individual users themselves.

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Facebook may not consider itself poorer without news sites, but without all content it is nothing. Its ambition of becoming so massive that for many users it effectively is the internet falls apart.

The very business model which underpins it is being questioned, picked apart.

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How it is answered may turn out to be existential for Facebook – which probably explains why it has been lobbing a few bricks around. It, however, is the one living in the glass house.

Telegraph, London

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