The Australian government’s approach to Facebook is laudable but flawed

The latest row about the power of tech giants looks simple enough: Australia is standing up for itself against Facebook and Google.

The background has more shades of grey. The internet has created undreamed of markets for news, innovative channels for its dissemination and countless forums for opinion and analysis. Audiences – readers and viewers – have never been bigger. Old business models for newspapers and broadcasters have been smashed, but new ones are not yet firmly established. Meanwhile, truth and fact sometimes face a toxic wave of misinformation conspiracy theories, propaganda and hate.

The paradoxes are many and the solutions elusive. Laudable as the Australian government’s motives may be, its proposal to force Facebook and Google to pay more to a wider variety of news organisations for the content that features on their sites has proved counterproductive. While Google has already announced deals with some news organisations, Facebook has simply exited the news game in the country – and Australians have been deprived overnight of news on their feeds.

The Australian prime minister, Scott Morrison, asserts Australia’s sovereign rights, perfectly fairly – having called the social media platform “arrogant” in actions and that tech companies do not “run” the world. Facebook asserts its commercial freedoms, in this case the freedom not to publish certain material. They ask why Facebook should be coerced into buying journalism, whether or not they want it.

The idea would be that if Facebook and the Australian media companies could not agree a “fair” price – a concept alien to market economics – then a competition quango would determine the appropriate fees, which – if the law passes – would be binding. Or, rather, would be binding if Facebook hadn’t decided to walk away.

It is true that Facebook, Google, Amazon and the rest of the gang have a dominant market share of online advertising, and Facebook’s actions show they are not afraid of using such leverage. Equally, as we see in Australia, they are not actually above the law. Should the EU and US follow Australia’s proposed example, things might be different – but not necessarily. The same market forces that make Facebook’s delivery of news viable in Australia apply universally.

Nor are the tech giants quite as eternally all-powerful as they are sometimes supposed. In many parts of the world, most obviously China, they have no such dominance, because the state there makes sure they do not – to the detriment of debate. And history shows that the supposed invulnerable giants of the past, eventually become vulnerable to technological change and fresh competitors. Will Google still be such a dominant search engine in 10, 20 or even five years?

It is also a myth that Facebook does not pay for news. Many media organisations, including The Independent, have commercial deals with Facebook. But there are also not always enough profitable arrangements available from the tech giants to smaller newsgroups to sustain journalism in a way a free democratic society has a right to expect. What might be called public service journalism, especially at the local level, is in jeopardy.

Too much power in the hands of too few is an undesirable situation – and it is also admirable to try to protect public service journalism. Certainly we do not want anything hastening the possible spread of disinformation, but the approach from the Australian government has flaws.

Facebook itself doesn’t have any obligation to offer news to anyone; and no one is compelled to use Facebook to find out what is going on in the world. The Australian government, and indeed every government in the world, cannot alter those central truths. Actions have consequences, some unintended.