Using news content on their platforms has always been something Google and Facebook have done — without paying.
So when the Australian government tried to force the tech giants to cough up some cash for publishers, there was always going to be fireworks.
That culminated in Facebook’s decision last week to block access to news to Australians.
It may have walked back on that, but the showdown continues.
Today, a new phase of the government’s plan starts.
Here’s what happens next.
Wait, what just happened?
The highly contentious media bargaining bill, formally titled Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2021, passed the Senate.
Because it’s been amended, it will return to the House of Representatives, but it’s likely to pass there imminently — as early as later this week.
That means a radical piece of media reform — the bargaining code — will come into effect.
So what happens next?
After the bill passes both houses, news businesses that want to be paid for content that appears on search engines or social media can sign up (provided they meet some conditions, including earning $150,000 per year in revenue).
At the same time, Treasurer Josh Frydenberg will consider the question of “designating” digital platforms like Google and Facebook and the services they offer, like search or news feed.
This means he will consider whether they hold a significant power imbalance over publishers.
If he does decide to designate one, he needs to provide it with 30 days’ notice.
After that ends, the platform will be designated, meaning it must start negotiating with news businesses about how much to pay them for content through mediation, or if that fails, arbitration.
That leaves Facebook and Google powerless to an arbitrator telling them how much they should pay — a risky proposition.
But I thought deals were already done?
Last week Google was part of several reported deals with Australian media companies, worth tens of millions of dollars.
At the time, Mr Frydenberg said “none of these deals would be happening if we didn’t have the legislation before the Parliament”.
That is, according to the Treasurer, the threat of the law prompted Google to sign deals.
Not long after, Facebook indicated it wasn’t happy with the way the law was drafted by blocking news content for Australians.
It has come around this week, reversing its decision to pull news from the platform.
What caused the Facebook about-face?
After discussions with Facebook, including between Mr Frydenberg and founder Mark Zuckerberg himself, the government amended the law.
The announcement coincided with an about-face from Facebook, which committed to reinstating news for Australian users.
There was even a reported deal between Facebook and Seven West Media — an indication the social media giant may be committed to the new environment.
Even though Facebook complained last week about a broad definition of news in the law, it appears the changes focus on the process for the Treasurer designating a service.
They require him to consider whether the platform has made a significant contribution to the Australian news industry.
Before designating the platform, the Treasurer must give notice, then wait 30 days before the designation is confirmed.
That gives the platform time to change his mind or reconsider how it will serve news to Australians.
The changes also allow platforms to strike different deals with publishers.
Is there anything wrong with the changes?
Belinda Barnet, senior lecturer in media at Swinburne University, says the changes mean there’s not much to encourage the tech giants to make “good” offers.
“They will just be making offers to please the Treasurer,” she said.
She hoped platforms would be designated and face the full obligations under the law, including a requirement for platforms to give access to engagement data and notice of algorithm changes.
But she believes the changes suggest the government may have only wanted the legislation to force the parties to the table.
“It feels like the government is using the prospect of designating them as leverage or as a big stick, that if they don’t behave as though they were designated, they will be designated,” she said.
Will small publishers be left behind?
The deals announced so far have mostly covered larger publishers like News Corp, Nine and Seven West Media.
Even more niche publishers with agreements, such as Junkee and Private Media, are larger than many regional outlets.
But the government doesn’t believe smaller media businesses will be left behind.
Communications Minister Paul Fletcher said on Wednesday: “We do expect there to be arrangements with small and regional publishers as well as the larger ones, albeit through a more efficient mode of engagement through a default offer.”
Could Facebook block news again?
Dr Barnet thinks it’s possible, but the next month will be important.
“Ideally what we’ll see, and what the Treasurer thinks he’s going to see, is over the next month Facebook will come out with a flurry of deals with media companies to prove to the government they are serious in their intent to provide an income to media outlets in Australia.”
“If they don’t, then the Treasurer could designate Facebook and what will happen, of course, is Facebook will promptly shut off news again.”
The company’s vice-president Campbell Brown said on Wednesday Facebook was retaining its right to take Australian news content down again in the future.