Last month, the Australian government clashed publicly with Facebook and Google over new legislation attempting to force the platforms to pay for news content. While the ugliest parts of the fight may have passed, the underlying issue remains. Both the Australian regulators and digital platforms resorted to coercion and punishment as a strategy over regulation—with consequences largely falling on consumers. Both sides must correct their combative approach quickly, as Australia’s ongoing privacy legislation review will impact more businesses in Australia. Any similar fight over privacy regulation would be disastrous for consumers.

Background

On the morning of February 17, Australians awoke to find themselves completely unable to share or view news on Facebook. Any attempt to upload or share a news story generated an error message stating, “This post can’t be shared.” Considering that over half of Australians report getting their news from social media—and that, in the middle of a pandemic, access to timely information is as critical as ever—the shock was felt country-wide. Some of the pages blocked during the ban included the Bureau of Meteorology, regional health and fire departments, and charities’ profiles. St. Vincent’s Health hospital in Melbourne, whose page was banned, even tweeted out that the ban’s timing came during a key moment in COVID-19 vaccine rollout—the hospital has just over 20,000 followers on Facebook.

The deliberate news content ban was Facebook’s weapon of choice in its battle against the Australian Parliament’s News Media Bargaining Code, which aimed to force social media platforms to compensate news outlets for linked content—for example, on Facebook’s newsfeed and in Google search results. Both Google and Facebook had previously described the code as “unworkable,” given that it would effectively tax hyperlinks from platforms to news content and subsequently restrict the ability to link freely between websites. Ultimately, Facebook only lifted the ban and restored news sharing after legislators edited the code delaying its implementation, giving platforms more time to strike bilateral compensation agreements with news companies and avoid the code’s binding arbitration measure.

Analysis

At the heart of the news ban is a misunderstanding by the government and digital platforms about how the regulatory relationship between the two entities should work. Speaking to Forbes on the subject of  the News Media Bargaining Code in February, Australian Competition and Consumer Commission Chairman Rod Sims asserted, “The only way this [news outlet compensation from platforms] is going to work is if this is mandated, a forcing device. And we’ve seen this around the world with Google and Facebook: the only time they’ve been moved is when they’ve been forced to.” The Facebook news ban illustrates how clashes between platforms and governments catch consumers in the crossfire. By taking a hardball stance to project a confident image, the government prioritized optics that evoked an equally rough response from platforms. While Facebook’s threat resulted in a temporary interruption to service, Google threatened to pull its search engine out of the country entirely—Google accounted for 94 percent market share of search engines in February 2021. As effective as these threats were to push through a compromise, both platforms and the Australian government were taking actions that threatened the internet public, rather than prioritizing their interests.

Both Australian regulators and platforms need to learn to cooperate on decisive regulatory issues in the interest of effective policy. This year, Australia is continuing its large-scale national privacy legislation review—aiming to update its 1988 Privacy Act for the age of digital platforms. Australia’s attorney general and the country’s competition body are conducting the review, and it will cover a number of complex topics, including protecting personal information, implementing a direct right of action and potentially creating a statutory tort law for serious invasions of privacy. Many expect that the outcome will heavily resemble the General Data Protection Regulation (GDPR) so the European Union can better do business with Australian companies.

The potential for fallout is higher if the Australian attorney general and digital platforms engage in similar brinkmanship on privacy reform like they did on social media payments to publishers. Privacy regulation will apply to all businesses based in or engaging with Australian enterprises. Some legal experts are already concerned that the reform’s ideas are too broad in scope regarding, for example, the creation of a privacy tort and the definition of data handling standards, stating that policy ambiguity could lead to difficulties in implementation for businesses. Australia has already proposed aggressive technology legislation, such as the first version of the 2018 Assistance and Access bill, which allowed the government to mandate industry assistance in intercepting encrypted communications through compulsory requests. Continuing such a rigid approach to technology policy would threaten the very privacy interests that the government is setting out to protect.

If privacy reforms fail to produce clear guidance on privacy regulation, consumers could face interruption in more businesses they engage with than just Google and Facebook. Both the government and platforms must refrain from considering nuclear options in the interest of sparing Australians from more meltdowns to score political points.

Image credit: Thaspol Sangsee