The Australian Facebook News Ban Isn’t About Democracy — It’s a Battle Between Two Rival Monopolies

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Last week, Facebook dramatically escalated the long-simmering feud between traditional media and big-tech barons. Australian Facebook users opening the platform on Thursday morning found they could no longer see or share any current-affairs content. The bans inadvertently swept up multiple government and nongovernment organizations in their net. The Bureau of Meteorology and the Australian Council of Trade Unions found their pages stripped of content. Facebook also emptied pages belonging to the Royal Children’s Hospital and the Western Australian Department of Fire and Emergency Services, even though they are coordinating responses to the pandemic and a rabid bushfire season, respectively. Facebook’s gamble was unquestionably dangerous, and many have decried it as a daft move. A chorus of commentators rang out against Facebook on Thursday. The broadsheet of Rupert Murdoch’s News Corp, The Australian, published an op-ed labelling the ban “a breathtaking act of corporate arrogance against the Australian people.” The News Media Association, peak body for the traditional mastheads in the UK, called it “a classic example of a monopoly power being the schoolyard bully.” Liberal PM Scott Morrison warned other nations that their suspicions were justified: BigTech companies . . . think they are bigger than governments and that the rules should not apply to them. They may be changing the world, but that doesn’t mean they run it. While Facebook soon restored the pages for most of the ban’s accidental victims, the breathtaking scale of their power move was clear. As a consequence, News Corp’s Rupert Murdoch and Facebook’s Mark Zuckerberg are now locked in a death roll.

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.”