Will Facebook and Google pull out of Australia?

February 18, 2021 10:30 AM PST | By Team Kalkine Media
 Will Facebook and Google pull out of Australia?

Source: 13_Phunkod,Shutterstock

Summary

  • Australia mulls law that will require tech and social media companies to pay for news content.
  • Facebook threatens to blackout Australian news from its sites around the globe.
  • Google’s Australia plan is unclear for the moment but agrees to pay US media giant News Corp.

News organizations and tech and social media companies have shared a symbiotic relationship until now, but that may change if Australia has its way. Canberra is planning to bring a law that will require Facebook and Google to pay news organizations for using their content on the sites.

As per the proposal, the news organizations and the two companies would negotiate a mutually acceptable deal, and if that fails, they will have to accept binding arbitration.

Talks between them and the Australian government have not yielded any resolution so far.

Facebook is already raising the pitch against such a move, threatening this week to blackout all news content from the country on its site.

Google, on the other hand, is also holding separate talks with Canberra but without much progress.

News organizations from around the world have been using their platforms to push out content in the hope that it would help expand their paid subscribers at some point.

Conversely, social media organizations use the content to provide a one-stop-shop for news on their platforms, thereby expanding their user-base and acceptance.

Pic Credit: Pixabay.

What Are the Ramifications?

The Australian move to legislate the content-sharing proposal between news producers and users has huge ramifications for these companies as similar legislation may follow suit in other countries.

Although it may seem a genuine attempt to back the media industry already struggling to get a grip in a rapidly changing business environment, the task is easier said than done.

While the profits of most media organizations dipped, the income of tech and social media companies accelerated at a spectacular pace, even surpassing the GDPs of several smaller countries. 

The Threat From Facebook

Facebook has threatened to restrict the sharing of news articles from Australia on its platform. But the company is hoping that the government would eventually back off from the proposal.

It claims that the Australian media organizations may lose as much as US$300 million from a Facebook content ban, a demoralizing prospect that would deter them from taking such a stand.

But will that affect Facebook? Not much, says the company. It claims that less than 4 percent of users check out their News Feed, which in essence means it will not affect the revenue streams from ads.

Pic Credit: Pixabay.

Google And News Corp Deal

Although Google’s plan concerning the Australian market was not immediately clear, it has signed a content-sharing agreement with media giant News Corp, which owns the Wall Street Journal. 

News Corp said on Wednesday that it had signed a partnership agreement with Google to provide paid content to the search engine giant over the next several years.

Google had said earlier that it might close its search engine in Australia, but it is unclear it is still mulling such as step.

Some governments in the past had contemplated charging tech companies for content but without success. But the latest attempt by Australia would be of huge significance if it succeeds.

Microsoft Corp had also recently supported the idea and hoped the US would take the lead. It urged the government to consider supporting the Australian proposal to help the free press.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.


Sponsored Articles


Investing Ideas

Previous Next