Facebook’s brazen attempt to crush regulations in Australia may backfire

But the dramatic showdown between Facebook, the Australian government and the country’s publishing industry also reflects an escalating strategy by the social network to more aggressively go after its antagonists — whether rival tech giants or regulators around the world.

That offensive strategy is led by CEO Mark Zuckerberg and his top policy adviser, former U.K. deputy prime minister Nick Clegg. It has involved, in recent weeks, publicly attacking rival Apple as anticompetitive for actions it took to limit Facebook and other app developers’ use of data and taking out above-the-fold ads in major U.S. newspapers pushing its vision for Internet regulation.

In a company blog post, William Easton, Facebook’s managing director for Australia & New Zealand, said the government left the social network with a “stark choice” — comply with a law that ignores the immense benefits Facebook brings to the news industry, or stop allowing news content.

“With a heavy heart, we are choosing the latter,” he wrote.

Facebook’s brazen move could easily backfire. Facebook is facing new regulation and legal scrutiny globally, and the move is a clear demonstration of the harm that can be caused by a company wielding such enormous power over free expression.

On Thursday, British parliament members were already calling Facebook a bully, and a former Facebook executive in Australia said the company went too far.

“Their decision to cut off news in Australia is a demonstration of their raw technical power and their willingness to use it for their own ends,” said Drew Margolin, professor of communication at Cornell University. “It reminds me of Mr. Burns’s decision to block out the sun in the Simpsons movie ­— it stokes fear but also encourages resistance.”

Google took an alternate and more conciliatory approach to the new policy, known as the Media Bargaining Law, cutting deals with the country’s biggest publishers to pay them for news but to avoid the most stringent aspects of the law.

Following Facebook’s move, hundreds of publishers lost access to revenue and readers previously gleaned from the site. The social network also erroneously blocked dozens of government and charity websites as well, including public health sites containing critical information about the pandemic during the first week of its coronavirus vaccine rollout.

Facebook fixed the problem about 12 hours later, saying in a statement that the law was written so broadly that it interpreted it to mean all content that would contain any news.

Promoting such authoritative sources is a key tenet of Facebook’s strategy to combat misinformation that has flooded its services, including Instagram and WhatsApp, during the pandemic. Such rash actions undermine that effort, said Claire Wardle, U.S. director for First Draft, a nonprofit organization dedicated to educating journalists about misinformation, whose own Facebook page was blocked.

Facebook’s actions in Australia will only add fuel to arguments being made in many countries considering moves to rein in tech giants, Margolin added.

For “Facebook and Mark, it’s too much about the money, and the power, and not about the good,” Stephen Scheeler, the former Facebook executive who previously held Eastman’s job in the region, said in an interview with the Australian. “Imagine if a Chinese company for example had done this, we would be up in arms. All Australians should be quite alarmed by this.”

He encouraged people to delete Facebook in protest.

Tension between the Australian government and technology platforms has been brewing for the better part of three years. In 2017, the government asked the country’s competition regulator to look at the impact big tech companies were having in Australia. The report released in May 2019 laid out a stark assessment of how large foreign tech companies, namely Facebook and Google, had too much power in the country. The competition authorities recommended a raft of changes covering privacy, competition, consumer welfare and the media industry. The bargaining code, published in its final version in late August, is a result of that report.

Facebook’s Easton said in a blog post that if the government proceeded with its plans, Facebook would need to shut down news sites’ Facebook pages, saying it was “the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”

In arguing against the law, Easton said it lets “publishers charge us for as much content as they want at a price with no clear limits.”

For years publishers all over the world have complained that they are at Facebook’s whims when it comes to their ability to generate revenue on the site, with frequent algorithm changes dramatically altering exposure and traffic to their sites.

Facebook said that in the first five months of 2020, the company generated 2.3 billion clicks for Australian news websites at no charge — additional traffic worth an estimated $200 million AUD to Australian publishers. In some countries, the company also has recently launched a separate news tabs, Facebook News, where Facebook pays publishers directly.

Behind the scenes, the company’s Australia office went into months of negotiation. Zuckerberg spoke several times with Australia’s treasurer, Josh Frydenberg, as well as Robert Thompson, chief executive of News Corp, the parent company of News Corp Australia, according to a person familiar with the matter. News Corp, which is owned by media magnate Rupert Murdoch, controls about 70 percent of Australia’s print news industry.

Murdoch has lobbied heavily for the new rules in Australia, part of a wider campaign against technology giants. In the United States, News Corp lobbyists have argued to lawmakers in testimony before Congress that Google’s dominance in the advertising technology market means news publishers get only a small portion of the money made from ads shown on their websites.

Critics of the Australian law say Murdoch’s outsize influence in his home country has led to regulations that are unfair to Facebook and Google.

“There’s certainly some merit to the argument that Murdoch and the conservative side of the politics are close here,” Johan Lidberg, a media professor at Monash University in Melbourne, said in an interview.

Still, support for the law goes well beyond the center-right ruling party, Lidberg said. “It’s clearly a bipartisan push,” he said.

Facebook‘s more aggressive stance of late has put it at odds with other tech giants. Apple has made changes to its latest operating system that affect the ability of app developers, including Facebook, to collect valuable data on people’s behavior. Facebook has publicly challenged Apple on that move, including in its most recent earnings call.

Zuckerberg said Apple’s moves on privacy “clearly track their competitive interests.”

Facebook also has made a point recently of pushing its own ideas about Internet regulation with a public campaign, a topic that probably will be taken up by the Biden administration and the recently elected Democratic Congress.

Lawmakers are planning to grill Zuckerberg and other tech leaders for upcoming hearings on free-speech issues next month.

Wardle, of First Draft, said Facebook’s new willingness to be aggressive on several fronts would be the harbinger for similar confrontations all over the world.

“Australia is the canary in the coal mine, and policymakers in Brussels and D.C. are sitting there eating the popcorn,” she said. “They’ve raised the stakes; I worry that it will lead to more of these on-the-edge brinkmanship deals — at a time when the world’s information ecosystem is already at a breaking point.”