Why Facebook blocked all news content in Australia – and why Google didn’t

Sundar Pichai Mark Zuckerberg
  • Australia wants to pass a bill forcing Facebook and Google to pay news publishers for their content.
  • In response, Facebook banned news content in the country, while Google made deals with publishers.
  • But the situation is much more complicated. Here’s what you need to know.
  • Visit the Business section of Insider for more stories.

Facebook made huge waves on Wednesday by blocking all news content for its Australian users and all content from Australian news publishers for users worldwide. 

Facebook said it made the move to avoid having to comply with Australia’s recently proposed News Media and Digital Platforms Mandatory Bargaining Code, which if passed would require companies like Facebook and Google to pay media publishers for the right to include their news content on social media platforms and search engines.

Google, however, decided that its best option would be to preemptively negotiate deals with publishers, including Rupert Murdoch’s News Corp and major Australian media conglomerates Nine Entertainment and Seven West Media.

Australian lawmakers have portrayed the proposed law as an effort to curb the tech giants’ power over digital advertising (a major cause of news publishers’ declining revenues over the past two decades). Facebook argued that the law misunderstands its relationship with publishers. 

But the situation is more complicated than an attempt to level the digital media playing field – and it could have consequences around the world.

Here’s what you need to know about the battle between Australia, Facebook, and Google over who pays for news online.

How did we get here?

News publishers have long had a bone to pick with companies like Facebook and Google, blaming them for eating away at ad revenues (and as a result, journalism jobs), while also exercising massive control over publishers through algorithms and benefitting from showing their users news content without paying its creators.

The companies have responded in recent years with various initiatives to fund journalism and boost news content on their platforms, such as Facebook’s Journalism Project and News tab, and Google’s News Initiative and News Showcase, but the impact has been modest and the industry continues to struggle.

Increasingly, regulators have sought to force Facebook and Google to pay publishers to use their content, and Australia has been at the forefront, along with the EU and countries including France, Germany, and Spain.

The Australian Competition and Consumer Commission, the country’s top antitrust regulator, has been working toward the law at the center of this week’s controversy for around three years amid Australia’s broader push to crack down on big tech.

What would Australia’s proposed law do?

The law as currently proposed would require companies like Facebook and Google to pay Australian publishers directly for news content that’s displayed or linked to on their sites, as well as give publishers 28 days’ notice before changing their algorithms.

Specifically, it would require them to individually negotiate content prices with publishers within three months, or be forced into an arbitration process where a government-appointed panel will pick between the publisher and tech giants’ proposals.

Is it likely to pass?

Yes. The lower chamber of Australia’s parliament approved the proposed legislation this week, and it’s now headed to the Senate, where it’s expected to pass into law, though discussions between the companies and the government are still ongoing.

Who would be the likely winners and losers?

As the Syndey Morning Herald reported, smaller publishers are not eligible for payments under the proposed law, so large publishers like News Corp may end up benefitting the most. (News Corp has urged the Australian government to pass the law).

Reporter Casey Newton also pointed out that the law also doesn’t require publishers to spend any new revenue on reporters or newsgathering efforts, meaning it could go to executives or investors.

Facebook’s and Google’s competitors could also gain an edge if their market share is diminished – Microsoft President Brad Smith endorsed the law last week.

As a result, the law could inadvertently further entrench Facebook’s and Google’s dominance, though it’s unclear what the ultimate impact would be on news publishers or the broader media ecosystem.

What was Facebook’s response? 

Facebook said in a blog post that the law “fundamentally misunderstands” its relationship with publishers – which it argued benefits publishers more. Facebook said news content is “less than 4% of the content people see” and that it brought in around $315 million for Australian publishers in 2020.

With less to lose, in its view, Facebook pulled the plug.

On Wednesday (Thursday in Australia), Facebook blocked Australian publishers from sharing or posting content from their pages, blocked Australian users from viewing any news content at all (even from international publishers), and blocked all users worldwide from viewing content from Australian publishers.

Some non-news pages also got caught up in Facebook’s dragnet by mistake.

What was Google’s response?

Alphabet subsidiary Google, which arguably has a more even exchange of value with news publishers, has fought aggressively against the proposed law. In January, the company came under fire for hiding some Australian news sites from its search results.

Google this week has been working on massive deals with top Australian media companies Seven West, Nine Entertainment, and even News Corp, which the company has repeatedly sparred with, and has been expanding its News Showcase in the region.

Read the original article on Business Insider

Advertisers prepare for big targeting changes

Hi and welcome to this weekly edition of Insider Advertising, where I get into the big stories in media and advertising.

First, to get this email in your inbox daily, sign up here.

This week: The end of ad targeting – what’s next for TV – the WarnerMedia blowback.

Tim Cook, Apple CEO
Apple CEO Tim Cook attends the world premiere of Apple’s “The Morning Show” at David Geffen Hall on Monday, Oct. 28, 2019, in New York City.

Targeting changes are coming to advertising

The tech giants are clamping down on advertisers’ longstanding use of cookies and other targeting tools, which will upend the $108 billion digital ad business.

The next big change could come as early as March, when industry sources are speculating that Apple will roll out its privacy-focused changes after an earlier postponement, they tell Lara O’Reilly.

Some context:

  • Marketers and publishers have already been bracing for Google’s cookie phase-out.
  • Not only will these changes wipe out how marketers aim ads at people, it’ll force them to change how they measure ads and attribute them to sales.
  • Adtech companies like The Trade Desk and LiveRamp are hard at work trying to replace the cookie, but the risk is that having a hodgepodge of solutions sows more confusion. 

What’s next:

  • The thing to watch will be if marketers all line up and adopt a universal replacement for the cookie – and if they move further into the arms of the big platforms, whose dominance over digital advertising has only grown in the pandemic.

Read more here: Companies are scrambling to prepare for Apple’s upcoming app privacy changes. Here’s what we know so far.

an american pickle hbo max

The big picture

The TV market has been rocked this year with big players like Apple TV Plus and CBS All Access banding together to attract audiences, Roku and Amazon aggregating streaming content, and new entrants like Disney Plus and Discovery Plus jumping into the streaming fray.

Ashley Rodriguez has six big takeaways from a UBS TV report looking out at the industry over the next 10 years. Here’s a taste:

  • The next five years will be a “land grab” phase where people may experiment with multiple services, but it will be followed by a period of consolidation.
  • Netflix and Disney Plus are best positioned to gain in the near term because of their premium content, pricing power, technology, and economic positions.
  • While we’ve already seen Quibi fold, the analysts also see smaller and local players like AMC Networks in the US, Atresmedia in Spain, and News Corp. struggling more.

Read the rest here: How Wall Street analysts think the next decade will reshape the global TV industry, including the likely winners and losers from Netflix to Tencent

the suicide squad
Idris Elba in “The Suicide Squad”

The WarnerMedia blowback, explained

WarnerMedia is under attack from all sides after it decided to release all its 2021 movies on streaming at the same time as theaters, which Hollywood fears will jeopardize revenue it’s historically counted on.

Travis Clark broke down the backlash:

While movie studios have experimented with alternatives to theaters amid the pandemic, like premium video-on-demand and streaming, Warner Bros.’ plan is certainly the most disruptive one yet.

The key points:

  • Many actors and filmmakers are concerned they won’t get the same payday they’d get from box-office returns.
  • Already struggling movie-theater chains are accusing WarnerMedia of sacrificing their business to boost its new streaming service, HBO Max, which has struggled to win over subscribers.
  • People have been trained by streaming services to get content when and where they want it, WarnerMedia is trying to sell its plan’s predictability at a time when it’s anyone’s guess when people will feel comfortable going back to the movies.

Read the rest here: ‘It’s very, very, very, very messy’: Why Warner Bros. faces major Hollywood backlash over its plan to release its 2021 movies on HBO Max the same day they hit theaters

Other stories we’re reading:

Thanks for reading, and see you next week!

– Lucia

Read the original article on Business Insider