Facebook Could Slam Doors On News Publishers

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News media, an industry already on the brink of endangerment, has suffered an unprecedented economic impact due to the ongoing COVID-19 pandemic. Over the past few months, reports of newsrooms and dailies laying off employees, cutting back on paychecks, or ceasing operation completely have become more common.

These desperate times have reignited an ongoing conflict between big-tech and news media outlets regarding the unfair distribution of ad revenue among digital platforms that display headlines as search results and the concerned publishing websites.

To compensate for these losses, many country’s governments are now opening up discourse with Google and Facebook to convince the two tech giants to pay publishers for reusing headlines and snippets from their websites in their search results and news feed.

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One such country is Australia, whose competition watchdog ACCC released a proposal about a month ago mandating Google and Facebook specifically to pay publishers in order to feature their content.

Facebook ready to butt heads with ACCC

While Google’s reply was less vehement, Facebook took a more garish approach.

In its response to the concerned proposal, submitted to the ACCC on Monday, the company rejected the suggestion to pay news sites for simply featuring links to their websites. Facebook further defended its stance by adding that, if need be, they could stop displaying news on the Australian wedge of the platform altogether, without any significant losses to their business.

To validate this claim, the social media site cited an increase in revenue despite altering Facebook’s algorithm in 2018 which has since given displaying posts from friends and family the highest priority.

“We made a change to our News Feed ranking algorithm in January 2018 to prioritise content from friends and family … Notwithstanding this reduction in engagement with news content, the past two years have seen … increased revenues, suggesting both that news content is highly substitutable with other content for our users and that news does not drive significant long-term value for our business. ”

The response also addressed how targeting only Google and Facebook, two private companies, for such policies was “unfair”. It went on to add that this solution to the Australian media crisis wasn’t “healthy nor sustainable.”

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Journalism Project

Facebook News Tab, a feature on the platform solely dedicated to news, was launched in October in 2019. It met with scrutiny about paying publishers even before it was released. Facebook somewhat addressed this by deciding to pay some publishers, all based in the US, for allowing the company to use their content.

Facebook further promised to invest $300 million in local American news media outlets by 2021. Sticking to this commitment, Facebook invested $100 million earlier this year, to boost select local American news outlets as part of its Journalism Project. But, as it is evident, these benefits are limited to American publishers only. All other publishers are only paid licensing fees and a small fraction of ad revenue based on the approximate number of clicks to the website.

While against the ACCC code of conduct’s initial draft, Facebook has proposed an alternate solution in which an independent body could mediate and resolve all problems faced by Australian news outlets.

Multiple countries cracking down simultaneously

In recent times Spain and France have similarly turned to changing laws related to big-tech in order to salvage crumbling economies.

From the point of view of policymakers, it would make sense to single out two companies that seemingly monopolize a majority of internet traffic and revenue.

If this trend continues of governments altering tech regulatory laws, the internet as we know it may undergo significant changes.

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