Facebook has agreed to pay Rupert Murdoch’s News Corp Australia for journalism from its local mastheads.
The deal has been secured just weeks after Australia passed a controversial world-first law aimed at making tech platforms pay for news content.
News Corp has not disclosed the value of the three-year contract in Australia. Last month, it clinched a global deal with Google.
Mr Murdoch’s media empire began with his Australian newspapers.
The deal covers all of News Corp’s content in the country – which is a significant amount.
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News Corp Australia controls about 70% of newspaper circulation in Australia with mastheads including The Australian, The Daily Telegraph and The Herald Sun. It also owns news.com.au.
It also owns the Fox News-modelled conservative TV network Sky News Australia, which has grown to become the most-shared Australian news brand on Facebook.
News Corp already has a different deal with Facebook for its US media titles. It involves the platform paying for stories to include in its Facebook News tab – a product not available in Australia.
The Australian deal is far more broad – it covers all News Corp Australia content shared on Facebook.
How has this been achieved?
Like other publishers globally, Australian media outlets have lost revenue in the past decade as advertisers turned to internet giants such as Facebook and Google.
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News Corp spearheaded a lobbying campaign in Australia – with support from its traditional rivals – to get politicians to make the tech firms pay for news content from its sites.
The Australian government then drew up legislation it said aimed to enshrine “fairer” contract negotiations between media and tech companies.
Both Google and Facebook had been strongly resistant to the media bargaining code.
It encourages tech firms to strike their own commercial deals with media outlets, such as this one between Facebook and News Corp.
Without such deals, the law would potentially force tech firms into forced arbitration with publishers over the value of content.
Battles over the law’s design led Facebook to suddenly block all access to Australian news content on its site last month.
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The news ban lasted for about a week before the Australian government made concessions and passed the law on 25 February.
On Tuesday, News Corp chief executive Robert Thomson praised the Facebook deal as a “landmark in transforming the terms of trade for journalism”.
“Rupert and Lachlan Murdoch led a global debate while others in our industry were silent or supine as digital dysfunctionality threatened to turn journalism into a mendicant order,” said Mr Thomson.
“This digital denouement has been more than a decade in the making.”
Analysts looking at Australia’s media law have long suggested that it is primarily designed to help big firms like News Corp as opposed to smaller media titles.
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Another one of Australia’s top three media companies – Seven West – also signed a deal with Facebook last month.
The Facebook-News Corp deal comes as a parliamentary inquiry in Canberra examined News Corp’s media dominance and influence in domestic affairs.
It was sparked by an anti-Murdoch petition from former Prime Minister Kevin Rudd which received over 500,000 signatures.
The battle between the Australian government and the tech giants over a law which would make them pay for news content has been rumbling on for a while.
But Facebook’s move to ban all Australian news content from its platform has taken the conflict to a whole new level.
One of Rupert Murdoch’s newspapers described it as “an act of war”. But others see the actions of Australia’s politicians as being an outrage against the principle of net neutrality.
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This week’s Tech Tent podcast asks whether Mark Zuckerberg overplayed his hand, making it more likely that other countries will follow Australia’s lead.
‘They botched it’
If Facebook’s founder thought that his bold move to impose a news blackout in one country would make politicians around the world rethink how they regulate his company, he may have been right.
The problem is that they now seem even more determined to clip its wings.
For one thing, the way Facebook carried out its bold move ended up looking ham-fisted.
“They botched it, there’s absolutely no doubt about that,” says Steve Evans, a former BBC correspondent who is now a reporter for the Canberra Times.
“Not only did they block media organisations, but they blocked government health websites. So access to up-to-the minute information about Covid, for example, was suddenly not available on Facebook.”
That meant the social media giant faced a wave of outrage, not just from Australian newspapers and politicians but around the world.
In the United States, Democratic Congressman David Cicilline said Facebook was not compatible with democracy, and that threatening to bring an entire country to its knees was the ultimate admission of monopoly power.
In the UK, Julian Knight MP, who chairs the Commons media select committee, said the company was behaving like a bully.
“This is a crass move,” he told the BBC.
“I don’t think they are being a good citizen, not just in Australia, but elsewhere [too].
“To pull the plug overnight represents the worst type of corporate culture.”
