ITP Techblog

If this was a game of poker it would be hard to know who was winning.

Australia has upped the ante with social media giants Facebook and Google over access to professional media content and introduced a new piece of legislation saying either they find a way to fund the professional media outlets directly or the government will regulate them.

Google wailed and gnashed its teeth and I suspect rended its garments somewhat, claiming most outrageously that it would pull out of Australia if the government did anything of the kind.

Then everyone calmed down a bit and yes, apparently Google has agreed it's OK for the Australian government to introduce laws that govern Australia and yes, it would have a chat with the various professional news outlets and come to an arrangement. It'll cost the company tens of millions of dollars a year but as we know in a multi-billion dollar industry that's less than it would cost to fight in court. So what the heck.

Facebook, however, has taken a different tack and called the government's bluff.

Alright, it says, if you think you can make a full house go ahead but with these cards we can make a royal flush and then baby, you're hosed.

Facebook has blocked anyone on the planet from sharing Australian professional media content on its platform.

Neither you nor I can share something we read on the Sydney Morning Herald or watch on Nine or whatever, and neither can the companies themselves. Well, not directly at least - you'd have to not just click on the "share" button on the story and fire it out into the maelstrom of social media, you'd have to copy the URL and change it using a shortener or similar. No preview image but you'd still get it to work. But that's not the point - the point is the top ten links on Facebook in Australia yesterday were predominantly professional news outlets and today they're sports teams and the United Workers Union who must be wondering at just what's going on.

That'll show them, thinks Facebook. Without us nobody will remember how to type www.smh.com.au or any of the other URLs and then they're screwed!

Of course, what Facebook is actually doing is providing the professional news outlets with clear evidence of just how much traffic comes directly from Facebook and how much that's worth to the company and I suspect many in the accounts departments are saying "actually this isn't too bad".

When you click on a paid link on Google or Facebook not only are you clicking through to the content you want, you're also costing that company money. The more clicks through paid links, the more money it costs them, so it's something of a double edged sword.

If I see a paid link I generally scroll down a bit further to the organic link and go that way. Sure, they don't get my juicy demographic data, but they also don't have to pay for my click. Which is good because, as I've said to several media outlets this week, I was going to go there anyway. I just happened to follow a link on a post instead of going directly to your site.

I suspect Facebook might find that jack is actually of the wrong suit and they're not holding the hand they think they are.

But there's another market at risk here, for Facebook. It's the advertisers. I work with a number of clients who spend a lot of money each month to place content on social media streams and if the traffic numbers are down they're going to want to pay less. We'll find out next month whether this has any impact on Facebook's traffic or not, but the other side of the coin is those companies who have spent a lot of time and effort building up their profile in Facebook will now face a daunting reality check. What if we do something that upsets Facebook - will they cut us off from the internet? What if it's not us but this industry, or this political authority over whom we have no control? What happens then to our audience?

Facebook might like to think about the signal its sending to its advertisers by cutting off an entire nation.

It also leaves the media landscape with a massive chasm down the middle. On one side you have professional media outlets, who have rules of engagement and who generally speaking are incentivised to tell the truth, to avoid breaking court suppression orders, who have editorial standards that are published and can be challenged, and who try not to sensationalise (yes, I'm definitely being generous here) and push readers towards extremist content.

On the other side, now completely unchallenged by truth, fact or standards of any kind, you have the neo-Nazi hate speech sympathisers, the white supremacists and anti-science extremists who work hard night and day to sew discord and lies about everything from cellphones to vaccines and quite a bit more besides.

It's not as if these readers can't read their professional media outlets of choice, but when you look at the scale of the Facebook platform's grip on what we loosely call "the media", the extent of its control is shocking.

Earlier in the week we ran a piece on Hootsuite's annual research into social media habits. In New Zealand, YouTube is the social media channel we most use, but closely following are Facebook with 83.5% of the population, Facebook Messenger (74.8%), Instagram (57%) and WhatsApp (40%), all of which belong to the Facebook consortium.

This report from 2018 shows there's quite a lot of data to suggest the number of Kiwis who get their news from social media outlets is large and growing by the day. I'd like to see some more up to date data but I fear I know the answer, if only because of the questions I get from the Facebook crowd about 5G death rays.

The fake news wars are upon us and we still see the damage done in the US, whether it's about inauguration crowd sizes or whether an election was stolen or whether windmills caused Houston citizens to freeze in their beds. It has to be challenged but now an entire audience segment can't see professional media content.

But let's not forget that news publishers and Australia have a part to play in all this. Rupert Murdoch's empire needs no sympathy from anyone and the way the Australian federal government treats the tech industry is appalling and has been for many years. Facebook is free to write its own rules as to who uses its service and who does not and if it wants to put its half of the advertising spend in Australia on the table for others then far be it from me to suggest calmer heads prevail. It's a private platform and it can set its own rules. That people like me have tried for years to get Facebook to apply those rules evenly and consistently is neither here nor there - it sets the rules and if you don't like it then you don't get to play with Facebook's ball.

At the end of the day, Facebook has opened a can of worms that I suspect will come back to haunt it in years to come. Not only has it demonstrated overwhelming market dominance (cue the regulators) and its ability to block content when it wants (cue the outrage over extremist content), it's upset advertisers and now risks alienating even more users than it has in the past.

Sure, it might win this hand, although there's no sign of the Australian government backing down (and the New Zealand government has sharply warned the company not to try anything that silly here. Yeah) but when the dust settles you might just find it's convinced professional news media that it doesn't need Facebook, convinced the regulators that it does need breaking up, convinced advertisers that there really ought to be more choices out there and convinced the users that they can type the letters "www" and find that content themselves.

And then there's the question of what this all means for Facebook's alleged neutrality. Its biggest defence throughout the years, it's go-to response is that it is a neutral platform, not a publisher of content. That taking Facebook to court over things people say on its platform is akin to suing the printer for the words published in a newspaper.

Surely that can no longer stand and Facebook's safe harbour is gone. It is the publisher because it's making editorial decisions about what will and will not be published on its platform. Take up that mantle and every defamatory statement, every abusive comment, every breach of name suppression will result in a civil case aimed at Facebook and the courts may well not object.

But let's let Matt Nippert have the last word. Four years ago, Matt broke the story about Apple not paying any tax in New Zealand, and since then a lot of attention is being paid to the FAANG (Facebook, Apple, Amazon, Netflix, Google) group by the revenue agents around the world. Facebook's biggest concern is likely to be the tax department coming for its share because if there's one way to make sure the local media outlets get funded properly to do professional news, it's to tax those companies that like to pretend they don't sell any products in any given jurisdiction.

The house always wins in the end, and that might be the lesson for Mark Zuckerberg out of all this.