Facebook’s stunning announcement suggests that the company is willing to stand up to Australia where Google has backed down. So far, though, it appears that the search giant might be playing the winning hand: Facebook’s move has been met with scorn in Australia, while Google’s strategy has been cheered by media organizations and politicians alike.
“We want to thank Google for the very constructive discussions that they have been having with stakeholders,” Australian Treasurer Josh Frydenberg told reporters during a press conference Thursday, where he blasted Facebook for its ban.
Facebook pulls the plug
Facebook’s move to block news content, which the government said it hadn’t received “any notice” of beforehand, was blasted by officials on Thursday.
“It’s a massive show of power,” said Belinda Barnet, a media and communications lecturer at Swinburne University in Melbourne. “Facebook hasn’t budged.”
There was already a “deterrent effect of this law on investment in the Australian news industry,” Simon Milner, Facebook’s vice president of public policy for Asia Pacific, told lawmakers, citing a recent decision from his team to launch a news product in the United Kingdom in which it pays publishers for access to content, instead of Australia.
Google looks for deals
For a while, it was fellow California-based tech behemoth Google — not Facebook — that appeared more ready to wade into the firestorm.
And at last month’s Senate hearing, Google’s Australia chief Mel Silva warned that “if this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia.”
The threat immediately sparked backlash, including criticism on social media and a sharp rebuke from the prime minister.
Tensions appeared to be cooling before this week’s bombshell. Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai spoke with Frydenberg, the treasurer, last weekend. Those talks were constructive, according to Frydenberg.
Google, at least, was inking deals — and the treasurer said Facebook had been “relatively close” to doing the same. The social network did not immediately respond to a request for comment about the result of those discussions.
While it was ultimately Google that gave some ground, Facebook’s dramatic blockade might come back to bite the company. It didn’t just block content from news pages: Australian users woke up Thursday to find the accounts of fire and emergency services, domestic violence charities, and government health agencies affected, too.
Facebook is reinstating pages that it didn’t intend to block, but the initial response will be costly for the company, according to Rob Nicholls, associate professor of regulation and governance at the University of New South Wales’ business school.
“It doesn’t matter if it’s deliberate … these are horrible things to do, even accidentally on a short term basis,” Nicholls said. “It’s dumb.”
Google, meanwhile, has bought itself some goodwill by forging new partnerships with newsrooms. Two of the deals — with Seven and Nine — are reportedly worth as much as 30 million Australian dollars (about $23 million) a year, though financial terms were not disclosed. The companies declined to comment.
“What’s really odd is that Facebook didn’t go ahead and do the same thing,” Nicholls said. “It’s a high-stakes game, and it is very risky.”
Now, experts say that lawmakers could retaliate by further targeting Facebook. The bill — which passed this week through Australia’s House of Representatives and is expected to become law, should it clear the Senate — could still be amended to include certain provisions for Facebook’s other properties, such as Instagram, according to Nicholls.
“We will continue to engage with the government on amendments to the law, with the aim of achieving a stable, fair path for both Facebook and publishers,” a Facebook spokesperson said.
Google, on the other hand, could potentially get a pass: Frydenberg did not rule out the option this week when asked whether he would decide to exempt it from the bill.
“I think Google read the room better,” Barnet told CNN Business. “Google wins in all this.”