Facing up to tech bullies is good news

Editorial | Mary Ma 24 Feb 2021

On the face of it, it was a victory for the Scott Morrison government and a face-saving climbdown for Facebook as a result of a last-minute agreement that Canberra would amend proposed legislation aimed at making Facebook and Google pay media outlets for the news contents on their platforms.

It was a compromise, with Facebook giving away the most.

The amendment means Canberra may not apply the code to Facebook if the social media giant has signed enough deals with Australian media outlets to pay them for content.

Also, the Australian government will give Facebook or others at least a month's notice if it decides to subject them to the new code that would trigger arbitration in the event of no deal agreed.

As part of the compromise, Facebook said the Morrison government clarified that the company would retain the "ability" to decide if news may appear on Facebook so that it would not be automatically subject to a forced negotiation.

What does this mean in particular? It means that Facebook can still pull news from Australia.

For Morrison, the amendment has not changed the legislation materially as its ultimate objective is to make the tech giants pay for news content - a kind of intellectual property - used on their platforms.

So if Facebook reaches payment deals with "enough" media outlets, the case warranting intervention from the state will no longer exist. In this perspective, the Morrison government achieved its policy objective.

On the other hand, the shocking move by Facebook in the past week angered not only Australians but many in other parts of the world. For example, Canada has pledged to follow up the matter with a plan to pass similar legislation.

Even if the combined population of both Australia and Canada may be too small to be intimidating enough for Facebook, the chance of Narendra Modi's populous India getting into the war against the tech giants cannot be ruled out.

Facebook might have wished to use the ban as a warning shot to other governments, but it has obviously backfired.

After all the turbulence, Facebook boss Mark Zuckerberg has finally agreed to pay though individual deals instead of a standard collection.

The company's insistence that it has retained the power to pull news was hollow since it has already done so even without an agreement.

The compromise was reached as the debate entered an advance stage in the Australian Senate. If Facebook had not agreed, it may well have had to pay more in future.

Like Facebook, Google had come under similar pressure but it chose to react differently. Instead of intimidating Australia, it signed a deal with Rupert Murdoch's News Corp undertaking to pay the latter "significant payments" for feeding it news content.

It is more likely than not that other governments will follow suit in light of Canberra's success in making the tech giants build a new business relationship with traditional media outlets that will help the latter survive the digital revolution.

Hong Kong's Secretary for Commerce and Economic Development Edward Yau Tang-wah had better initiate a similar plan locally.

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