The day news disappeared from Facebook a journalist emailed Rod Sims at 5:39am.
Key points:
- Lobbying from established media about a new code governing Google and Facebook was noted inside material for the Communications Minister
- A Facebook submission was highly critical of the ACCC
- A summary had it calling the watchdog’s data “flawed or inadequate”, “selective and incomplete”
“First I have heard of this,” the Australian Competition and Consumer Commission (ACCC) chair wrote 20 minutes later, forwarding the information to Treasury deputy secretary Meghan Quinn and an unnamed person.
Facebook and search giant Google had long been aggrieved by legislation that would force them to pay news sites for content users found or linked to.
A year ago today Facebook took what Peter Lewis of the Center for Responsible Technology at the Australia Institute called the “nuclear option” – it blanked local news.
“Facebook has blocked news content from their platform,” an unnamed Treasury analyst in the Law Design Office emailed at 10:24am AEDT that morning, according to documents released through the Freedom of Information (FOI) process.
“A pop-up occurs saying Australian news content cannot be posted due to the government’s new law.
“Pages that have been blocked include traditional news websites such as ABC and The Australian (and) many government pages — including ACT Health, Hobart Women’s Domestic Violence Shelter and a lot of the COVID related information.”
Soon, public servants were working up lists of sites blocked by the internet giant, which had blanked a broad range of pages from Facebook’s estimated 17 million monthly users in Australia.
Globally, the US-based company claims 2.9 billion monthly active users on its site.
“Satire publications including the Beetota (sic) Advocate and the Chaser … some pretty niche publications which are borderline news ie Vogue, Top Gear, Scientific American, Australian Geographic and amusingly, Facebook’s own Facebook page [are also affected],” observed a Treasury analyst in the department’s Law Design Office.
Just after midday, an unnamed Department of Foreign Affairs and Trade (DFAT) official told Treasury what Treasurer Josh Frydenberg’s office had passed on to it about a discussion with Facebook chief executive Mark Zuckerberg.
“The conversation was ‘constructive’,” they noted.
“Mark Zuckerberg has raised a few remaining issues with the government’s news media bargaining code. But both the Morrison government and Facebook are committed to continuing the dialogue and try to find a path forward.”
Misinformation warning
Notes that follow detail an aggressive push-back by the Treasurer and Communications Minister Paul Fletcher against the arguments of the multi-billionaire Facebook co-founder. It is not clear from the documents if these arguments were raised directly in the conversation.
“The government is committed to enacting the news media bargaining code, which is now in the Senate after passing the House of Representatives last night,” a note of the meeting said.
“As we have said all along, we expect companies who are doing business in Australia to comply with the laws of the land.”
The email goes on to note Mr Fletcher’s previous arguments for the government’s model, and posits that removing news from Facebook would devalue its overall product because it might become a source of misinformation.
“As the Communications Minister has said, if Facebook were to operate in a mode where effectively all content from a news organization — with a fact checking process, with employed journalists and with editorial policies — is not available on Facebook then surely over time that would call into question the reliability of information on the platform.”
With the subject line “Facebook points” the email went to senior members of the Markets Conduct Division in Treasury, including assistant secretaries Robert Jeremenko and Tom Dickson. The latter passed it on to Ian Beckett in Washington DC, the capital of the United States.
Mr Beckett, minister-counseller (Treasury) at the Australian embassy there, sent back a detailed response at 2:46am. The content of the email was entirely redacted.
Pressure builds
Documents from inside the Communications Department suggest mounting public pressure from traditional media may have influenced a dramatic change in the federal government’s position on making Facebook and Google pay news organizations for sharing content.
What began as a voluntary code was rapidly switched into a mandatory one.
Documents from inside the department detailing the back-and-forth of negotiations and submissions suggest the change might have occurred as pressure from News Corp and other news organizations was raising the temperature.
The brief for the minister was prepared to summarize issues ahead of a meeting with Facebook to “discuss the Code with the Australian news media companies”. That meeting was meant to discuss Facebook’s participation in negotiations.
Under “Main Issues and Expected Outcomes”, the brief for Communications Minister Paul Fletcher stated:
“News media businesses have continued to campaign for immediate, mandatory codes of conduct. The intensity of these arguments has increased in recent weeks … additional pressure exerted on the news media sector by the COVID-19 pandemic has prompted further calls for action by the industry , particularly News Corp.”
The note is undated, but points to the March announcement of the planned closure of national news agency Australian Associated Press (AAP). The agency was later saved in June, after significant job losses.
On April 2, 2020 a blistering editorial in The Australian described an “existential crisis for the news business” and explicitly called out what it described as Communications Minister Paul Fletcher’s inaction.
“The government timidly asked parties to negotiate a voluntary code or it would institute a mandatory one by year’s end. Google and Facebook are neither in a hurry nor acting in good faith. Why would they?”
Politicians, the editorial said, had been “clueless bystanders to the implosion of media business models”.
“Our future is imperilled because Google and Facebook — ubiquitous, super-profitable, amoral, digital raiders — are inserting themselves between news outlets and customers. These two companies aren’t better at telling stories than we are; they don’t even try to compete on that score. What they’re expert at is gobbling up advertising revenue via algorithms that suck up our content.”
“Mr Fletcher has a duty to push the foreign giants harder and to rescue local content, local stories and local voices from the cons’ rip-off virus.”
Again, the undated documents do not explicitly link the editorial to any shift in policy.
However sources involved in the negotiations, from the side of the technology companies, say they were “blindsided” by the shift from a voluntary to mandatory code.
The documents, obtained using the Freedom of Information (FOI) process, show Facebook was highly critical of the competition watchdog, resisted negotiation with Australian news media businesses and might have told the regulator one thing but done another.
The undated minute for Mr Fletcher said the ACCC believed Facebook had “resisted negotiation with Australian news media businesses” in relation to many issues, “particularly in relation to value exchange and payment for content”.
Paying news providers was, publicly, the most contentious issue for the tech giants.
“Facebook indicated an increased level of engagement on these issues in a letter to the ACCC on 6 April,” the minute said, before questioning if that had actually happened. “It is not yet clear whether this has resulted in tangible outcomes.”
Facebook was highly critical of the ACCC.
A departmental summary of the company’s submission has it criticizing the regulator for “misdiagnosing the problem” through an “inaccurate conflation of products and services provided by Google and Facebook”, of “factual errors”, “flawed or inadequate” evidence and “selective and incomplete” analysis that “mischaracterises its practices”.
“Facebook suggests that a bargaining code would serve only to protect the interests of powerful media businesses in a highly concentrated market,” the summary of its submission found, “without any evidence of market failure.”
Facebook fights back
Facebook did not comment in response to the information in this article. It has previously said it spent three years being clear about its concerns with the laws, with multiple public submissions laying out its perspective.
Shortly after the news blackout was rescinded, one of its top global executives, former UK deputy prime minister Sir Nick Clegg, wrote about what he called the “real story” of what happened.
“At the heart of it, in Facebook’s view, is a fundamental misunderstanding of the relationship between Facebook and news publishers,” he contended.
“The assertions … that Facebook steals or takes original journalism for its own benefit always were and remain false.
“It is ironic that some of the biggest publishers that have long advocated for free markets and voluntary commercial undertakings now appear to be in favor of state sponsored price setting.”
In response to queries, a for Mr Fletcher released statement that did not address the question of whether lobbying caused code changes to the eventual code.
“After less than a year in operation, all evidence is that the Morrison Government’s News Media Bargaining Code has significantly corrected the market imbalance between global digital platforms and traditional news media organisations,” it said.
“It is not surprising that other nations, including Canada, are now following Australia’s policy lead.”
News Corp was contacted, but the ABC was waiting for a comment from the company.
Google’s director of government affairs and public policy, Lucinda Longcroft, said the company had been providing “financial, technical and training support” to the Australian news industry for two decades.
“We’ve signed agreements with more than 1,200 news publications around the world, including with 170 large, small and independent Australian titles,” she said in a statement.
Facebook has since changed its name to Meta. The company is attempting to build a virtual world called a “metaverse”, but it is facing challenges.
Its global number of daily active users has fallen for the first time ever, and a grim financial forecast caused its shares to drop $332 billion in value in the worst one-day fall in stock market history.
Users, particularly the younger ones beloved by advertisers, are spending more time on platforms such as TikTok.
How you know about this
People can apply to government departments and agencies for access to information they created using the Freedom of Information (FOI) process.
Individuals can ask for information about their interactions with the department or issues of interest. Costs may apply. Search “FOI” and the name of the agency you are interested in to find out more.
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