Facebook’s Australian Bluster Shows US Regulators Correct Approach: Focus on Market Power and Exploitation
Facebook has rejected Australian regulators’ efforts to “level the playing field” between Google and Facebook and news outlets, revealing the limits of a pay for content approach. Facebook told the Australians that they do not need and won’t pay for further news content they promote on their platform in Australia, citing that there would “not be significant” impacts on its business if it dropped news articles from its platform.
Views differ on whether Facebook actually does need news articles to survive. Digital Content Next CEO Jason Kint says, “Facebook is bluffing… Without the currency of news feeding through its bloodstream, they die a slow death.” But Stratechery’s Ben Thompson has written recently that because of the abundance of content available on the Internet, determining the quality of the content on the front end is largely irrelevant to the big platforms, “rather [they need] to attract as much content as possible, and then algorithmically boost whatever turns out to be good.”
In any event, regulators should not be distracted by attempts to get Google and Facebook to pay for news content on their platforms. Rather, U.S. regulators should focus on the tech giants’ market power and their exploitation of the online marketplace. The UK Competition and Markets Authority found that Google and Facebook’s advertising profits were so large that they were “consistent with the exploitation of market power.” Toward this end, Google is pressing ahead with its plan to eliminate third-party cookies, which will “cement Google’s dominant position in digital advertising,” despite its own study showing it would reduce revenue from news publishers by an average of 62%. It’s preventing this kind of monopolistic power that should be the primary focus of regulators.
The following is a statement from John Stanton, former D.C. Bureau Chief at BuzzFeed and co-founder of the Save Journalism Project:
“Mark Zuckerberg is happy to let Facebook be a tool to spread misinformation and fake news, but is apparently fine with Facebook dropping real news altogether. Facebook and Zuckerberg have always tried to cover up their schemes by throwing pennies at programs to ‘help’ journalists, when in reality they’re happy to profit off fake news and refuse to pay for real news. Zuckerberg is the antithesis of free expression and will do everything in his power to dismantle a system that helps inform and protect the public. Regulators need to reign in the tech giants’ total domination of the online marketplace before it’s too late.”