It has been a tumultuous month for Facebook and Google, as the world watched with interest while Australia threatened to make them pay for any local news content they displayed, Google threatened to pull out of Australia completely (to Microsoft’s delight, as Bing was touted as a replacement) and Facebook simply banned the posting of all news by Australian users and organisations.

It all began when the Australian government proposed a new media code (the Media Bargaining law) that would see online publishers forced to pay news corporations whenever a local news story was displayed in search engine results, or in a news feed etc.

Largely seen as a desperate attempt to prop up a flailing news media industry, and let them get their hands on some of that sweet digital advertising cash, Google and Facebook both rejected the proposal as “unworkable,” prompting backlash from the Australian PM himself.

Google Response

Google initially took a hard-line theoretical response, suggesting that they would no longer be able to do business in Australia if that was the case. The Australian government lashed out in return, suggesting that they would simply move to Bing, a comment that Microsoft applauded (dreaming no doubt of a market in which they actually had search engine market share), and pretty much everybody else laughed about. (A search on Bing Australia for “Best beach Sydney” returned a result for Bondi Beach Post Office in the number 1 spot.)

Facebook Response

Facebook responded by banning Australians from seeing, sharing and interacting with news on the site, resulting in a 30% drop of global traffic to Australian news sites, and a 13% drop of local traffic.

EU Watching Carefully

European legislators are reportedly watching developments closely potentially with a view to implementing similar laws themselves. It wouldn’t be the first time that European news organisations have sought “royalty-type” payments from Google, but the Australian law promised to be the most significant change to the balance of power yet.

Compromise and Capitulation

Despite the tough talk though, Google rushed to sign a deal with media organisation Seven West, for them to join their “News Showcase” platform, a service that will allow Google users to access news and paywalled content even before any legislation was passed, apparently showing that they were willing to negotiate.

Facebook on the other hand reversed their ban on Australian news after significant amendments were made to the proposed code.

Media Bargaining Code Passes

On the 25th Feb 2021, Australia did pass the “Media Bargaining Code” into law, and the tech giants will need to pay news publishers in order to display their content in search results and feeds. However, the original, far more stringent proposals have been significantly amended after the Facebook news blackout and Google’s (empty?) threats, giving the companies far more control over the bargaining process. In addition, they will be exempt from the requirements in the event that they already have a deal in place, like Google’s hastily signed deal with Seven West, and Facebook appears to be following suit after announcing it’s own in-progress deal with the same group.

Critics of the new law however point out that, once again, small and independent publishers are being ignored, both by government and in private tech company deals, and it is traditional corporate media companies who will benefit.