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Sunday, June 16, 2024 | Back issues
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Facebook to Spend $1 Billion in Support of Journalism

After a prolonged kerfuffle with the Australian government, Facebook reversed its ban on local news content and agreed to spend a large amount in support of local journalism while maintaining Australia’s laws were a giveaway to multinational media corporations.

(CN) — Facebook pledged $1 billion in support for local news organizations Wednesday in the aftermath of its standoff with the Australian government over how much the social media platform should pay local news outlets for their content. 

Nick Clegg, vice president of External Affairs, wrote a blog Wednesday explaining that while the company values journalism’s role in functioning democracies, it believed the Australian government’s rules reflected a misunderstanding of Facebook’s business model and its interaction with news organizations. 

“A new settlement needs to be based on the facts of how value is derived from news online, not an upside-down portrayal of how news and information flows on the internet,” Clegg wrote. 

A week ago, Facebook banned Australian news organizations from posting stories to its platform after it appeared the government was poised to pass a law requiring the technology company to pay news outlets. 

While critics of social media’s ability to disrupt the traditional news business hailed the move, others said that the law would favor large media conglomerates, including ones owned by media-tycoon and conservative firebrand Rupert Murdoch, who controls two-thirds of the daily newspaper circulation in Australia. 

Mike Cannon-Brookes, a technology tycoon living in Sydney, went so far as to say the Australian government was doing Murdoch’s bidding and called the law “a shakedown.”

Facebook has since rescinded its ban and struck a deal with the government, but also hinted that the law would favor large media companies over the small local news outlets that were conjured by lawmakers. 

“Facebook would have been forced to pay potentially unlimited amounts of money to multi-national media conglomerates under an arbitration system that deliberately misdescribes the relationship between publishers and Facebook — without even so much as a guarantee that it is used to pay for journalism, let alone support smaller publishers,” Clegg wrote Wednesday. 

However, Clegg did concede that banning all local news content from its platform was an overcorrection. 

“We erred on the side of over-enforcement,” he said. “In doing so, some content was blocked inadvertently. Much of this was, thankfully, reversed quickly.”

The company is looking to move beyond the heated debates now that a deal has been struck and Facebook has restored the posting rights of local news outlets in Australia. Instead, it is touting its financial contributions to journalism, noting it has already invested $600 million in the news industry since 2018 and will invest $1 billion further in the next three years. 

“We absolutely recognize quality journalism is at the heart of how open societies function — informing and empowering citizens and holding the powerful to account,” Clegg wrote. 

Google, which was also embroiled in the Australian news controversy, has likewise pledged to spend $1 billion in support of the journalism industry. 

Google has also cut deals with news publishers around the world to pay fees in exchange for hosting news stories on its platform. 

“I have always valued quality journalism and believed that a vibrant news industry is critical to a functioning democratic society,” Google and Alphabet CEO Sundar Pichai said in a blog post in October announcing the deal. 

Follow @@MatthewCRenda
Categories / Business, Media, Technology

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