Tech giants’ fearsome power

Facebook did everyone a favour when it shut down links to Australian news sites in its dispute with the Government.

Not only did Australian mainstream news disappear from Facebook but collateral damage abounded. Fire information in the height of the bush fire season, official Covid advice, weather advisories and all sorts of other links were severed. We even learnt yesterday that the New Zealand Climate Change Commission was affected.

This all illustrates the gigantic power of Facebook. Australians and New Zealanders have come to depend on it in so many ways and needed a wake-up call.

Facebook’s news ban might have been intended simply to underline its bargaining strength. Instead, it sent a message to beware. Its dominance is such that it cannot be left to do as it chooses.

Whatever these companies’ high-flying "missions" are — Facebook’s is to "give people the power to build community and bring the world closer together" — the behemoths are private indentities in the business of making money.

The Australian Government, strongly backed by Opposition Labor, is finalising laws so that Google and Facebook can be compelled to pay media for news obtained through their sites. The legislation recognised the huge power imbalance.

What spooked the tech companies were the compulsory arbitration and unknown payments if negotiations failed. They fear worldwide precedents.

Google initially threatened to withdraw its search engine from Australia, but backed off, in part, when it realised Microsoft’s Bing could step in and perhaps step up. It has been agreeing since to significant payments to large media.

Hopefully, small media will not be left out.

In the face of the "bullying", resolve hardened. Australian Prime Minister Scott Morrison said Australians would not be slaves to Google and Facebook. Facebook has this week backed down and the Government agreed to compromises concerning the legislation.

Facebook had argued only 4% of its posts were for news, and that it ferried large amounts of traffic to news sites.

But that 4% is crucial when large parts of the population receive their news via Facebook. It and Google, meanwhile, have been hoovering up the vast majority of digital advertising, some of that with the help of news summaries and/or on the way through to the news sites.

The media, more important than ever during a pandemic and vaccine rollouts, have been stripped of resources. Some have become more beholden to Facebook and Google.

Facebook is already a conduit for conspiracies and misinformation. Take out the professional news sites, and Facebook "news" becomes dire and dangerous. Advertisers, already wary of Facebook, should show further restraint in being associated with it.

The compensatory payments to media will be, by the standards of the tech profits, relatively small. But, just as the companies avoid paying much tax around the world, the resistance was unsurprising.

The French have been instituting similar measures and have the potential heft of the European Union. Canada also appears determined.

New Zealand needs to follow. On this occasion, it can thank Australia and Mr Morrison for the heavy lifting.

While Facebook was set up primarily as a "social network", it has broadened its scope into other areas. Many small businesses, for example, have built themselves around a Facebook presence.

That makes them potentially exposed. If prudent, they should be examining risk mitigation should Facebook flex its bulging biceps in a way that harms them or should something else go wrong.

The millions of New Zealanders on Facebook could begin to have second thoughts about the platform.

Will more of them become ‘‘inactive’’ or, like many younger Kiwis, find other social media? And might some of the thousands of organisations who use Facebook, in due course, seek other options?

Comments

Facebook users can't be bothered accessing legit news sites.

Happy for journalism to be bandied about without payment?

Why don't you block sharing to FB, ODT?

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