Facebook makes U-turn, plans to invest $1bn in Australian news industry

*The global tech giant declares that it is more than willing to partner with news publishers, saying ‘we absolutely recognise quality journalism is at the heart of how open societies function

Gbenga Kayode | ConsumerConnect

Sequel to the global tech giant’s earlier standoff against the new regulation, Facebook says its argument with the Australian Government ‘misunderstands’ its relationship with news publishers in the country.

The company Wednesday, February 24, 2021, announced that it plans to invest at least $1 billion in news content over the next three years.

The announcement comes a week after Facebook blocked Australian users from viewing news on its platform in response to a debate with the Australian government over how much Facebook should pay news publishers for the right to surface links to their content.

ConsumerConnect had reported that Facebook has announced that it would block Australian users from viewing all news links on its platform.

The action came in response to proposed legislation from the Australian Government that would force global advertising giants (or “digital platform corporations”), such as Facebook and Google, to pay news publishers or organisations for the right to share their content.

Whereas in ensuring fairness to the new media industry by offering the ad revenue it is entitled to, Microsoft, another tech giant said that it would support an Australian Government shift to media rules that require big, global technology corporations to share profits with newspapers when they link to news content.

At the time, Facebook said the proposed law left it facing “a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia.”

The company had stated that “with a heavy heart, we are choosing the latter.”

However, in a U-turn of some sort less than a week later, Facebook has decided to make a deal with the Australian Government that will put news links back on Australian users’ feeds.

In regard to supporting news in the country, Facebook disclosed it believes the argument was born from “a fundamental misunderstanding of the relationship between Facebook and news publishers.”

According to the tech giant, if the fresh regulation is passed, the Australian law would force Facebook to pay “potentially unlimited amounts of money to multinational media conglomerates under an arbitration system that deliberately misdescribes the relationship between publishers and Facebook.”

It wrote: “It’s like forcing car makers to fund radio stations because people might listen to them in the car — and letting the stations set the price.”

Now, in an effort at supporting the news industry, Facebook has pledged to invest at least $1 billion in news over the next three years on top of the $600 million it’s already invested in the sector since 2018.

Nick Clegg, Vice-President of Global Affairs at Facebook, in a blog post published Wednesday also said: “Facebook is more than willing to partner with news publishers.

“We absolutely recognise quality journalism is at the heart of how open societies function — informing and empowering citizens and holding the powerful to account.”

Recall that Google, which had also initially expressed opposition to Australia’s proposed law, now plans to invest $1 billion in the news industry over the next few years.

Google CEO Sundar Pichai said in a blog post.

“The business model for newspapers — based on ads and subscription revenue — has been evolving for more than a century as audiences have turned to other sources.

“The Internet has been the latest shift, and it certainly won’t be the last …. We want to play our part by helping journalism in the 21st Century.”

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