Power struggle in Australia: why Facebook is now backtracking

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After the lockdown comes the easing - also on Facebook.

Less than a week after the decision to block news content in Australia, the provider of the world's largest social network has rowed back.

The news pages that the media on Facebook have uploaded their content to will soon be visible again - and this would make it possible again for users to post articles from newspapers on the network.

The withdrawal of the news blockade can be seen as a reaction to the extremely damaging external impact for the American company.

Facebook's decision was criticized not only by politics and the media, but also by organizations such as Human Rights Watch.

Why is the power struggle in Australia so significant and also portrayed so prominently in the German media?

The dispute between politicians who want to oblige digital platforms to make payments to the media by means of a new media law and large digital corporations as operators of these same platforms reflects developments in the USA and Europe.

"There is no doubt that Australia is waging a proxy war for the world," Australian Chancellor of the Exchequer Josh Frydenberg reportedly said.

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The choice of words is martial, the legal situation differs depending on the continent and country, but in fact the conflict over compensation payments for the use of journalistic content has the character of a possible blueprint for governments in many countries.

At its core, it is always about the goal of obliging digital corporations to negotiate with media companies.

The lever by which this goal is to be achieved differs - from antitrust law to copyright law, various approaches to regulation are conceivable.

Law is being weakened

But Facebook didn't just back down in Australia - Facebook also achieved something in its own favor.

The compulsory negotiation stipulated in the law is now to be modified.

Like Google, Facebook was afraid of a mechanism that, in the event of a failed negotiation, would have activated an arbitration tribunal that determines the amount of the amounts to be paid to media companies.

The sum of the amounts is therefore incalculable.

This mechanism should now only be activated as a last resort.

Until then, there is now more leeway and more time to come to an amicable agreement between Facebook and the media.

But keywords such as “more flexibility” and “more leeway” often mean that there are more loopholes to avoid reaching an agreement.

But this should not exist either.

The digital corporations must therefore prove that they have made every effort to come to an agreement with media companies.

It should not be possible to completely avoid negotiations - only the way to an agreement is less regulated.

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In concrete terms, this means: Facebook, like Google before, is now entering into negotiations with media companies.

The search engine company Google had already shown what a more elegant way of at least defusing Australian law looks like.

Because when a media company enters into a deal with Google or Facebook, the procedure prescribed by law does not even have to be initiated.

With the “Google News Showcase” project, Google has created a kind of shell - for a few months now, Google has been concluding license agreements with hundreds of publishers around the world, including Germany.

The publishers send a fixed number of articles per day into this envelope and are paid a lump sum for this.

Google in turn uses the contributions for a news offer.

Licenses as mushrooms?

Facebook is preparing a similar offer called Facebook News.

Negotiations are also currently underway with German publishers.

Facebook News is then also the name of the solution for Australia: All publishers with whom you agree deliver their posts to Facebook and they turn it into a news mix, which of course differs depending on user interests.

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Problem recognized, problem solved?

It's not that easy.

First of all, it would have to be ensured that all media companies that are legally authorized can actually enter into negotiations with Google, Facebook and other platforms.

The danger that threatens is the division of the media industry into "haves and have-nots".

So in those who can negotiate deals because they are big and well-known - and those who publish in the niche, in rural regions or with special offers on the market.

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Last week the international media company News Corp., backed by the Australian media mogul Rupert Murdoch, announced a license deal with Google.

Without Murdoch, who owns numerous media outlets in his Australian homeland, the law would probably not have come into existence in the first place.

Now he was also an important player in the market, who showed himself to be flexible the moment a good offer was on the table.

So now - first of all - a compromise.

But which noticeably changes the power balance between technology groups and media companies.

The EU competition commissioners and also the German ministries will take a close look at the legislative text that has been passed.

In Europe, meanwhile, the IT group Microsoft, which also operates a search engine with Bing, has put itself next to the publishers.

On Monday, a coalition between Microsoft and European publishers' associations was announced that wants to jointly develop its own model that guarantees and channels payments from tech companies to the media.

This new - and quite unusual - coalition has long since identified the potential problem of the agreement reached in Australia.

The aim is to also incorporate an arbitration mechanism into the legislation in order to compensate for unequal market power between the negotiating partners.

It is crucial that the regulators in European countries do not assume that individual deals by publishers with Google and Facebook replace legislation, said the Belgian media manager Christian Van Thillo according to the "Financial Times": "All publishers should reach an agreement - nobody should be left out. "