Shot Across the Bow

Facebook implemented its Australia-wide ban on news in response to the Morrison government’s proposed News Media Bargaining Code, soon set to pass in the Senate.

The legislation would force Google and Facebook to pay publishers for digital content. Facebook argues that the new code “penalizes Facebook for content it didn’t take or ask for.” The Australian Competition and Consumer Commission counters, insisting that the laws will redress “a fundamental bargaining-power imbalance between news media businesses and the major digital platforms.”

Neither position is genuine. There is no doubt Facebook is “asking for” Australian news content. It’s also making money from it, although it’s unclear exactly how much. Similarly, Rupert Murdoch’s News Corp, the driving force behind the new code, has a long track record of favoring fundamental power imbalances — but only when they serve its interests.

This isn’t the first standoff between tech giants, national governments, and traditional news companies over profits and market share. Google implemented a news ban in Spain in 2014 when that country enacted similar legislation. On the other side, the EU’s much vaunted copyright directive in 2019 was a warning shot aimed squarely at Facebook and its ilk. But the dramatic — and very public — nature of the current standoff puts both parties in an awkward spot.

It seems that Facebook has chosen to coerce a “middle power” like Australia, gambling that the risks are worthwhile in exchange for setting a precedent. But Morrison is under immense pressure. Backing down would be a potentially career-ending humiliation, and he is now facing considerable heat to hold the line. All of Australia’s larger trading partners and allies are watching the events with great interest and murmurs of encouragement.

Rupert Murdoch has also made his expectations — and the consequences of ignoring them — clear. After all, Morrison came to power in an internal party coup backed by Murdoch. In case he had forgotten, some twenty-four hours before Facebook’s ban came into effect, News Corp’s most vicious attack dogs begun raising questions about Morrison’s leadership. The timing was curious.

Mastheads owned by the Nine Entertainment Company, the Murdoch family’s traditional mortal enemies, have also urged the Morrison government to stand its ground. They’ve cited a recent tax victory over Amazon as a precedent asserting the superiority of governmental power, while deriding Facebook as a “nationless state” getting too big for its boots.

For its part, Google has wagered that negotiated peace is preferable to open war, sealing a deal with News Corp to pay for content just hours before Facebook spat the dummy. As pressure on Facebook now mounts, the days and weeks to come will reveal whether the tech giant has badly miscalculated.

Equally Selfish Claims

National governments and traditional news outlets have presented the standoff as a struggle between democratic nations and out-of-control corporations. But this conflict is anything but. At its heart, the battle is not one between democracy and monopoly. Rather, it’s a battle over who gets to enjoy monopoly power.

Traditional media barons are selfishly indifferent to the tech giants’ equally selfish desire to dominate the market. National governments worldwide are attempting to mediate the dispute, not in the interests of democracy or a free press but in order to maximize their chances of staying in power.

News Corp’s behavior is particularly brazen. For years, it has relentlessly attacked public broadcasters as sinister left-wing ideologues and fetters on the free market. In comments that could aptly describe News Corp itself, Rupert Murdoch’s second-favorite son, James, railed against the BBC, arguing that it “is incapable of distinguishing between what is good for it, and what is good for the country. . . . the scope of its activities and ambitions is chilling.”

Knowing that print media audiences are dropping, New Corp’s long-term strategy planned to absorb losses in its newsroom operations while waiting for local competitors to despair and die. Meanwhile, the company clearly understood that the tech giants posed a threat to their scheme to become the dominant source of news.

When it comes to dealing with rivals or those seen as sympathetic to them, News Corp wields a great deal of political power and has few scruples in using it. In 2015, it photoshopped a picture of New South Wales premier Mike Baird to make him resemble North Korean leader Kim Jong Un as revenge for Baird making an announcement on social media.

The Daily Telegraph ranted that

Baird has revealed he wants to emulate . . . the state’s Dear Leader with a plan to bypass traditional media such as newspapers, TV and radio and speak to his people using Twitter and Facebook.

In 2017, News Corp successfully campaigned to scrap Australia’s anti-monopoly media ownership controls. It begrudgingly set aside ambitions to roll back anti-siphoning laws, which ensure that sporting events are available on free-to-air television, in order to head off its emerging rivals in big tech. At the end of 2020, the company triumphantly declared that “the tech platforms’ days of free-riding on other peoples’ content are ending.”

Baronial Shockwave

Many Australians were no doubt shocked to find the content they could view and share suddenly and unilaterally restricted. Trust in Facebook has been low for years and most Australian users seem to understand that the platform harvests and sells their data. Nevertheless, it’s unprecedented for Facebook to flex its complete control over terms of access so boldly.

The Australian government may successfully stare down Mark Zuckerberg this time. But the defense of the Murdoch monopoly is hardly a victory for ordinary people. We will still be presented with two lousy options: either huge, unaccountable tech fiefdoms that can silence anyone at will, or sprawling media monopolies working tirelessly to keep any hint of democracy at bay.

Faced with such a choice, is it any wonder that more and more people — on the Left and the Right — are distrustful of both traditional and social media? The only real way out of the impasse is to campaign for a decommodified, baron-free media under public ownership and democratic control.