One of the many challenges facing the world’s biggest social media network, the prospect of paying publishers in order to post news on its network had Facebook in a bind this past week. But, it appears that the verdict is clean. Facebook has decided that it doesn’t need publishers as it’s not willing to pay for their content.
This happened after the ACCC which is Australia’s competition watchdog was asked to produce a code of conduct that would be imposed on tech companies in order to balance out the playing field.
It appears that the advertising industry was hit hard by the coronavirus crisis and so it seemed necessary to mandate this new code of conduct in order to alleviate the burden that would inevitably come from an unregulated tech landscape.
The reports show that ACCC’s proposed code of conduct requires both Google and Facebook to pay for any news links that appear on their platforms. For Facebook, this includes Instagram and WhatsApp, and for Google this includes YouTube and Google+, or that’s what one would assume.
This is aimed at improving the financial prospects of media companies that have been hit hard by the advent of social media. Facebook replied saying that it prefers to maintain a healthy rivalry with news publishers instead of cow-towing to the proposed regulations. The platform is willing to remove news clips and links as that wouldn’t affect its bottom line in the least because news is just a fraction of what Facebook users go to the platform for.
The social media giant went on to express that news content has seen a marked reduction in engagement over the last two years whereas the network’s revenues continue to soar in comparison. This only proves Facebook’s point that they could easily replace news content with other forms of content that’s more satisfying and attractive to its audience.
In closing, the network expressed that even without news content, it wouldn’t suffer any significant changes in the number of active users in Australia considering the fact that news content doesn’t offer any long-term value for the network’s business model.
Facebook’s stance makes sense when you consider the fact that tech companies shouldn’t be forced to bail out private media companies, especially when they don’t provide any long-term financial value to them. At the end of the day, Google and Facebook exist for the public good and are designed to entertain, inform, and solve problems for their consumers based on consumer behavior.
While this particular incident transpired in Australia, it’s but one of many such incidents around the world that are starting to happen as social media companies continue to get bigger and bigger, with business models that seem to constantly negatively affect established news publishers.
Although Facebook is generating higher traffic numbers every day, it’s still willing to play ball with the journalism world, as shown by its $300 million journalism partnership pledge starting in January 2019, as well as an additional $100 million since March 2020, which it has pledged to local news outlets in different parts of the world.