Americans — including President Joe Biden, members of Congress and everyone sharing news online — should heed what Facebook is doing in Australia.
On Wednesday, Facebook abruptly blocked everyone in Australia from sharing and posting legitimate news stories on its site. It did this to avoid compensating news organizations, as required by a forthcoming Australian law.
In other words, the company that wants everyone to share everything is itself refusing to share. Facing the prospect of having to play nice, it threw a fit and degraded its site across an entire nation.
America should prepare to resist such bullying.
Australia is previewing what’s to come as the U.S. and other countries pursue antitrust enforcement and reforms to rein in digital platforms, and preserve free press systems essential to their democracies.
The bullying apparently won’t work in Australia. Government officials are furious and proceeding with plans to pass a law requiring Facebook and Google to negotiate compensation with news organizations or face arbitration.
Tech giants must accept that this is happening and adjust.
Facebook’s reaction could ultimately help the news industry. If people can no longer get free snippets delivering the essence of the news on social media, they’ll have to subscribe to newspapers or visit websites of media companies that invest in reporting to remain informed.
People used to get and share music online for free, which hurt artists and that industry. Government intervened, platforms evolved and paid subscriptions now account for most music sales. Facebook and Google can’t continue to be the circa 1999 Napsters of news.
Google also threw a fit and threatened to withdraw its search service from Australia. But it relented after Microsoft offered to replace it with Bing, and comply with the law, in an extraordinary gesture of support for sustaining the free press.
Don’t overlook the context. Facebook and Google are widely used because they offer great services. But both have been found to be abusing their dominant positions in ways that harm other companies, industries and consumers.
Those findings prompted Australia’s proposal, to require the sites to compensate news organizations.
The Australian Competition & Consumer Commission in 2019 produced an extensive study documenting anti-competitive behavior and calling for multiple policy changes, including new rules for mergers. It sums up the situation well:
“The benefits that digital platforms have brought to consumers and businesses have not come without costs and consequences. It is these costs and consequences that governments must now grapple with, both in Australia and in other countries.”
U.S. regulators and policymakers are just a step or two behind, and recently concluded their own investigations. That includes an October report by the House Judiciary Committee’s antitrust subcommittee.
“The Subcommittee’s series of hearings produced significant evidence that these firms wield their dominance in ways that erode entrepreneurship, degrade Americans’ privacy online, and undermine the vibrancy of the free and
diverse press,” the House report states. “The result is less innovation, fewer choices for consumers, and a weakened democracy.”
That was followed by state and federal antitrust cases filed against Google and Facebook.
The Australia flap should help the U.S. prepare for what’s likely to happen next. As investigations lead to antitrust enforcement and policy reforms, forcing tech giants to change their behavior, threats and service disruptions may ensue.
To avoid shocks, elected officials should be sure to communicate early and often what’s really happening: Platforms are exploiting their dominance and hurting competition, so enforcement, regulation and policy reforms are required.
Of course the companies will push back. That’s disconcerting because their services are valued and have an extraordinary influence on daily life.
But dominant digital platforms must play by the rules and stop harming competitors, the free press and democracy. Bullying and threatening nations only show how much this is needed.