Over the last several months, both Facebook and Google were locked in a battle against the Australian government over a proposed legislation which would require them to pay news publishers. They warned users of worsening services, they warned that users’ data would fall into wrong hands, and even threatened to pull some of their services from the country. But then, on Wednesday, the two companies chose diverging paths. While Google relented and struck a multi-year deal with Rupert Murdoch’s NewsCorp, Facebook, stayed true to an earlier warning, and barred news sharing on its platform in the country. How did we get here? At the heart lies a proposed News Media Bargaining Code — currently in the Australian Parliament — released by the Australian competition watchdog which forces Google and Facebook to enter into arbitration with news publishers to decide a price for their content. The code also requires platforms to give news companies nearly a month’s notice of any changes to its algorithms which may affect referral traffic to news sites, or those affecting rankings of paywalled news, and “substantial changes” to how news is displayed, and even advertising of news. But why? The idea was simple: the regulator felt that news publishers had paid dearly since the advent of social media, and internet giants. This disparity, according to Australia's competition watchdog, has created "fundamental bargaining power imbalance" between news publishers and digital media platforms like Facebook and Google. "This imbalance has resulted in news media businesses accepting less favourable terms for the…
