Facebook’s decision to ban legitimate news from being shared in the middle of a global pandemic is a breathtaking display of defiance. It is also entirely consistent with the social media behemoth’s belligerent corporate character.
The move – which inadvertently resulted in Facebook pages of health departments in Queensland, WA and ACT being wiped just before a critical vaccine rollout begins – shocked the Australian media and political establishment. But, in hindsight, nobody should have been surprised. This was vintage Zuckerberg. You don’t blitzscale your way from Harvard dorm room to trillion-dollar titan in the space of a few years without putting lots of noses out of joint.
The Australian government’s media bargaining code, which is at the centre of the dispute, has been endlessly debated over the past year. Media companies say they should be paid for producing journalism that benefits the platforms, but they lack the bargaining power to extract any value for it. Tech giants claim they do not really benefit from the existence of news, that news represents a small part of the overall activity on their platforms, and since they actually send these news organisations free traffic they shouldn’t be paying them anything.
There are merits to both sides of the argument.
Yet there is little doubt stronger regulation of Google and Facebook is urgently needed. The two companies have scarily dominant positions in their respective markets of search and social media, and also an entrenched duopoly in digital advertising. Meanwhile, their ascent has coincided with a host of societal problems ranging from rising misinformation and fake news, to a troubling surge in online conspiracy theories and growing internet addiction.
The media bargaining code attempts to revolve the digital duopoly’s market dominance by using the threat of arbitration to force Google and Facebook to strike commercial deals with media companies. Could there have been a more straightforward solution? A digital platform tax or levy may have been cleaner and simpler and has existing parallels elsewhere in the economy.
There are already taxes on addictive and harmful products (think cigarette excise), and levies on disruptive new market entrants that are used to compensate legacy incumbents also exist (for example, the levies on Uber rides that are distributed to taxi licence holders).
Regardless, the debate about the merits of the media bargaining code in Australia has now become moot. The bill to bring the code into law has sailed through the lower house of Parliament and is all but certain to be passed by the Senate. Facebook is effectively saying that the overwhelming majority of elected officials in a sovereign parliament are wrong.
It is possible that a news-free Facebook could be positive for society and the media industry in the medium term. But at this fragile moment in history – a once in a century health crisis coupled with a fake news epidemic – for the primary gateway to information for millions of people to block critical information from being shared was chillingly irresponsible.
Throughout its relatively short history, Facebook has pursued a win at all costs, take no prisoners approach to business. It has also shown little regard for the wreckage it has left behind. For many years its official corporate mantra was “move fast and break things”.
When a potential competitor emerges, Facebook either buys it (as it did with WhatsApp and Instagram) or copies its key features (as it has done with Snapchat and Tiktok).
It has repeatedly abused the privacy of its users and demonstrated a shocking ineptitude at thwarting the misinformation and conspiracy theories that have flourished on its platform, which are now demonstrably weakening democracies.
The spat over the media bargaining code highlights the fiendishly complex task governments face in regulating digital giants with operations that span the globe, billions of users and perhaps unrivalled power.
Tech proponents argue Australia’s regulation is deeply flawed – and to an extent they may have a point. But there is flawed regulation all across the economy. Most wildly profitable and dominant companies (even Google) begrudgingly accept these kinds of impositions as part of their social licence to operate, a cost of doing business. Not Facebook.
Mark Zuckerberg’s middle finger to the Australian government has been noticed all around the world. Already Canada is signaling it will copy the media code, while Europe (which has tried repeatedly to force the digital giants to pay news organisations, with much less success than Australia) is likely to follow.
Facebook has repeatedly shown it does not mind a scrap. But this may be its biggest fight yet, and it is only just beginning.