Facebook pledges $1 billion to news industry after Australian standoff
The Australian news media code has caused great upheaval in the social media space. After Facebook's recent shutdown of news feed in the country and quick reversal, the social media giant has pledged to invest $1 billion to "support the news industry". Having initially denied the revenue sharing agreement, Facebook now has plans to spend that budget on the news media over three years.
Google had also pledged $1 billion toward news industry
Facebook's news media investment move is a facsimile of a similar initiative by Google after it capitulated to the Australian government's demands to negotiate a revenue sharing deal with the local news media outlets. Like Google's news investment, Facebook's $1 billion pledge to the news industry is also global in nature. The company will separately negotiate revenue sharing deals with Australian news providers.
Google, Facebook had threatened to cut off news for Australians
Both Google and Facebook had been engaged in a Mexican standoff with the Australian government over the news media code that would mandate the tech giants to pay Australian news media outlets for using their content on their platforms. Both companies had threatened to cut off news services on their platforms for the country, but Facebook actually went ahead with its threat.
Facebook called off news ban after Australia compromised on arbitration
While enforcing the promised news ban in the country, Facebook also nuked several pages belonging to essential services such as suicide prevention agencies and COVID-19 information channels. However, Facebook relented after it reached a compromise with the authorities on the contentious aspect of government arbitration between Facebook and the news outlets. The company now has a choice as to which publishers it can support.
Google had signed similar news revenue sharing deal in France
Australia isn't the only country forcing social media to pay news media houses for their content. Google had already signed a similar deal with France last month. Google's deal requires it to pay publications based on variables, such as news volume and readership metrics. This seems to be a global phenomenon, with a growing number of countries making social media giants pay for news.
