Facebook has pledged at least $ 1 billion to pay for the news over the next three years, matching Google’s spending plans to an extent that aims to contain the fallout from the social media group’s short-lived ban on social media. news in Australia.
Facebook vice president of global affairs Nick Clegg unveiled the budget in a post defending last week’s decision to temporarily restrict Australian news due to a bill that would have allowed major media companies to demand a “blank check” from the platform.
“A lot of people rightly ask: what the hell was this all about?” Clegg wrote in a Facebook post. “At the heart of it, according to Facebook, is a fundamental misunderstanding about the relationship between Facebook and news publishers.”
Google and Facebook’s total funding of $ 2 billion reflects the significant shift in business power to struggling news groups. But it’s unclear whether the sums will meet growing publishers’ demands or avoid potentially more costly actions by regulators around the world.
Facebook agreed on Monday to restore the news in Australia after the government proposed amendments to a bill, which sought to make Big Techs pay for information by greatly increasing the bargaining power of publishers.
“It’s understandable that some media conglomerates see Facebook as a potential source of money to make up for their losses,” Clegg wrote. “But does that mean they should be able to demand a blank check?” This is what Australian law, as proposed, would have done.
Facebook’s abrupt decision to block news sharing in Australia sparked a public reaction, especially after access to critical emergency services and health pages was mistakenly interrupted.
Clegg said it was “legally necessary” for the ban to be imposed before the legislation came into effect, so Facebook “erred on the side of over-enforcement.”
“In doing so, some content was inadvertently blocked. Much of this was, thankfully, quickly reversed, ”he wrote.
Facebook has in the past said that the news brings “negligible” value to its platform. But amid threats of tighter regulation, Google and Facebook have in the past three years started paying some publishers for topical content, together signing deals in more than a dozen countries. Clegg said Facebook has spent $ 600 million on news since 2018.
But the negotiated value of these publishers rose sharply in Australia as the government pushed for reforms that gave media groups the right to seek binding arbitration in disputes with Facebook or Google.
More importantly, Google struck a deal last week with Rupert Murdoch’s News Corp, Australia’s largest publisher, for an undisclosed amount.
While Google pledged last year to spend $ 1 billion on news over three years, Facebook never pledged to spend a specific amount. The Financial Times has trade deals with Facebook and Google.