Meta is changing how it deals with US news publishers in the wake of its first-ever drop in revenue.
Meta’s latest quarterly results were a bit of a disappointment, with the company reporting its first drop in revenue in the company’s history. As the company looks to cut expenses, it appears its news investments are among the first things to go, according to Axios.
Meta first struck the deals in 2019, agreeing to pay publishers for their content for three years. The company was paying the New York Times more than $20 million, the Wall Street Journal more than $10 million, and CNN more than $3 million.
Facebook says the move reflects what content its users are consuming.
“A lot has changed since we signed deals three years ago to test bringing additional news links to Facebook News in the U.S. Most people do not come to Facebook for news, and as a business it doesn’t make sense to over-invest in areas that don’t align with user preferences,” a Facebook spokesperson told Axios.
Campbell Brown, Meta’s VP of media partnerships, told employees the company was freeing up resources for more creative pursuits. Meta has already begun telling news publishers of its decision.
Google currently has deals with some 300 news publishers in the EU, with the company working to make it easier for other publishers to sign up.
Google was opposed to paying publishers for years for linking to and displaying their news. The company maintained publishers benefited more than it did, thanks to the traffic Google sent their way. Needless to say, news publishers disputed this claim, blaming Google and other search engines for ruining the news industry. The EU recently forced Google’s hand, passing legislation that requires search engines to pay for the news content they display.
The legislation appears to be paying off, with Google now paying 300 publishers in half a dozen countries for the right to use their news. What’s more, the company is rolling out new tools that will make it easier for new publishers to sign up with its program.
“So far, we have agreements that cover more than 300 national, local and specialist news publications in Germany, Hungary, France, Austria, the Netherlands and Ireland, with many more discussions ongoing,” writes Sulina Connal, Director, News and Publishing Partnerships.
The company’s new tool, the Extended News Previews program (ENP), will begin rolling out in Germany and Hungary, and then to additional EU countries in the coming months.
Canada is looking to follow in Australia’s example, forcing online giants to pay news publishers in exchange for their content.
News publishers and online giants, such as Google and Facebook, have fought against paying traditional news publishers for their content when they link to it. The tech companies have maintained that news publishers gain more than they do just from being linked to, but news publishers have disputed those claims.
Australia recently passed legislation to force Google and Facebook to pay publishers for news, leading to a short-lived standoff when Facebook refused, before eventually capitulating. Canada seems to be going down the same road, introducing legislation that would force the companies to pay news publishers for the content they use, according to CBC.
“The news sector is in crisis,” Heritage Minister Pablo Rodriguez told a press conference Tuesday. “Traditionally, advertising has been a major source of revenue for the news business. That’s less and less the case. I would say the reality is grim.”
“News outlets and journalists must receive fair compensation for their work,” Rodriguez continued. “It shouldn’t be free.”
Given the precedent Australia has established of forcing tech giants to comply, it’s likely Canada will also succeed.
The French Competition Authority has fined Google a record $593 million (500 million euros) for not negotiating in good faith with news publishers.
Google has a long history of not paying news publishers for the content it uses. The company has maintained that publishers receive far more benefit than it does from the arrangement, a point that many news publishers and regulators have increasingly pushed back against. Google has been changing its stance, but that hasn’t been enough to stop regulatory scrutiny.
According to NBC News, France’s Autorité de la concurrence has now fined Google a whopping $593 million for not abiding by an April 2020 ruling ordering the company to negotiate “in good faith” with news publishers. The Authority took issue with Google not discussing remuneration for content covered by “neighboring rights,” as well as for not including press image usage.
To make matters even worse for the search giant, the Authority has ordered Google to come up with a remuneration offer for publishers’ protected content within two months. Should the company fail to do so, it will be fined up to 900,000 euros a day.
The decision follows another fine of $267 million a month ago by the Authority over Google favoring its own advertising services over competitors’.
After being forced to work with Australian news publishers, Facebook and Google are going on the offensive in the US.
Australia introduced legislation to force tech companies to pay for the news they link to and use. Both Facebook and Google vehemently objected, with the former briefly blocking all Australian news from its platform and the latter threatening to pull out of the country. Ultimately, both companies came to an agreement with Australian regulators and news publishers, but they clearly don’t want a repeat in the US.
According to NBC News, both companies are stepping up their fight against a bill that was introduced in the US to address the perceived inequality between large tech platforms and the news publishers that rely on them. Google has even gone so far as to launch a website touting its support of the news publishing industry.
To be fair, there are concerns the bill could put too much power in the hands of big publishers, as well as conglomerates that control multiple newspapers and media outlets. Nonetheless, supporters of the bill, such as Sen. Amy Klobuchar, emphasized the need for a level playing field.
“We have to have an even playing field and allow people to negotiate,” she said in a congressional hearing.
Not all tech giants are opposed to increased legislation. Microsoft not only sided with the Australian efforts, but has also been assisting EU publishers in efforts to duplicate that success. The company has also outspokenly voiced support for such efforts in the US.
The spat between Facebook and Australia appears to be mended for the time being, with the two reaching an agreement.
Facebook started blocking Australian news from its platform last Wednesday, in response to proposed legislation that would force tech companies to pay for news they link to or promote. The legislation has been the source of division in the tech industry, with both Google and Facebook fighting it and Microsoft embracing it.
While Google initially threatened to pull its search out of Australia, it ultimately began negotiating with news publishers to pay them for their content. Facebook, on the other hand, embraced the nuclear option, blocking Australian news altogether. The response was swift and severe, with the company widely condemned and one UK lawmaker calling it a bully.
Facebook has now made nice with the Australian government negotiating terms that will see it allow Australian news once more.
“Well, Facebook has refriended Australia, and Australian news will be restored to the Facebook platform,” Australian Treasurer Josh Frydenberg told reporters Tuesday. “Facebook has committed to entering into good-faith negotiations with Australian news media businesses in seeking to reach agreements to pay for content.”
The agreement included additional amendments, making forced negotiations less of a threat. The amendments include:
a decision to designate a platform under the Code must take into account whether a digital platform has made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements with news media businesses;
a digital platform will be notified of the Government’s intention to designate prior to any final decision – noting that a final decision on whether or not to designate a digital platform would be made no sooner than one month from the date of notification;
non-differentiation provisions will not be triggered because commercial agreements resulted in different remuneration amounts or commercial outcomes that arose in the course of usual business practices; and
final offer arbitration is a last resort where commercial deals cannot be reached by requiring mediation, in good faith, to occur prior to arbitration for no longer than two months.
Needless to say, both sides are claiming victory. Long-term, however, it’s hard to argue that Australia’s efforts won’t be used as a template by other countries to force Big Tech to reach more equitable agreements with publishers.
Microsoft is working to help EU publishers get paid for their news, similar to an Australian law that would enforce the same thing.
The Australian government began a showdown with Google and Facebook with proposed legislation that would force tech companies to pay for the news they quote and link to. Google has traditionally been opposed to such measures, claiming news publishers benefit far more than it does from its use of their news. Similarly, Facebook has also bitterly opposed the new legislation. While Google ultimately began working out paid deals, Facebook escalated the showdown by blocking Australians from posting or linking to news.
In the meantime, Microsoft has set itself apart by being willing to cooperate with Australia from the outset. The company even worked with the government to assure legislators it could pick up any additional search volume, should Google be unwilling to play ball.
The Redmond company is now taking things a step further, working with EU publishers to ensure tech companies pay for the news they use, according to U.S. News & World Report.
Microsoft is working with lobbying groups, such as the European Publishers Council and News Media Europe, in addition to groups representing magazine and newspaper publishers. While the EU has been working on ways to help publishers better negotiate with tech companies, it’s hardly a level playing field, with the tech companies holding the upper hand.
Microsoft joining forces with publishers provides a considerable boost to their negotiating position, while also setting Microsoft up to benefit should Google or Facebook be unwilling to come to an agreement.
Google has taken the extraordinary step of threatening to pull its search engine out of Australia if it’s forced to pay for news content.
Google has long been at odds with news publishers. Many have tried to get the company to pay for news, but the company has made it a practice to link to and use news content without paying. Google has always claimed that news publishers benefit far more than it does from the arrangement.
In spite of that, the company has begun caving to pressure. France has ordered Google to pay for news and the company recently set aside $1 billion to help fund partnerships with publishers.
Google seems unwilling to give into Australia’s demands, however, according to ABC News. According to the report, Google has said it will pull its search engine if Australia moves ahead with its plans to force the company to pay.
“If this version of the code were to become law, it would give us no real choice but to stop making Google search available in Australia,” Mel Silva, the managing director of Google Australia and New Zealand, told a Senate inquiry. “And that would be a bad outcome not only for us, but also for the Australian people, media diversity, and the small businesses who use our products every day.”
That stance did not go over well with the government, with Australian Prime Minister Scott Morrison saying “we don’t respond to threats.”
It remains to be seen how things will eventually shake out, but it’s not looking good for Google Australia either way.
Days after Facebook CEO Mark Zuckerberg announced a new strategy to determine which news outlets can be trusted, Rupert Murdoch proposed another way to solve the fake new problem that has been bugging the social media platform. Murdoch, executive chairman of publishing empire News Corporation, proposed that social media platformspay publishers for “trusted” content.
Murdoch is specifically targeting Facebook and Google, the two companies that are now acting asgateways exercising considerable influence on how news gets distributed. Of course, the two companies are considered a duopoly in online advertising, owning the lion share of the market.
Instead of popularizing “scurrilous news sources through algorithms that are profitable for these platforms but inherently unreliable,” Murdoch is now urging Facebook and Google to pay money for content from trusted news sources. Murdoch proposed an arrangement similar to carriage fees ora charge paid by satellite and cable television providers to local broadcast stations as payment for the right to broadcast locally. Murdoch expressed his opinion via a statement on the News Corp website.
“If Facebook wants to recognize ‘trusted’ publishers then it should pay those publishers a carriage fee similar to the model adopted by cable companies. The publishers are obviously enhancing the value and integrity of Facebook through their news and content, but are not being adequately rewarded for those services. Carriage payments would have a minor impact on Facebook’s profits but a major impact on the prospects for publishers and journalists.”
Fake news is a persistent issue that Facebook has been facing lately. Previously, the social media giant was accused of enabling thespread of fake political news during the U.S. and French presidential elections. Last August, this prompted the company to block ads from publishers who share fake news. Just last week, Facebook CEO Mark Zuckerberg announced a new way to combat news by letting theplatform’s users decide for themselveswhich outlet they think is reliable.
At the moment, neither Google nor Facebook issued a comment on Murdoch’s proposal.
