Facebook’s foes mount up – first Australia and then Apple
Facebook’s brief but tempestuous standoff with the Australian government over a world-first pay-for-news law is only the start of a string of regulatory battles that the world’s biggest social network faces in 2021.
CEO Mark Zuckerberg started the year on the offensive, blocking news across Rupert Murdoch’s home turf of Australia to fend off demands that Facebook pay media companies for content shared on its platform.
On Tuesday, Zuckerberg struck a compromise after 11th-hour talks with the government on the legislation that’s also aimed at Google and is expected to pass Australia’s parliament this week. But a regulatory domino effect is already under way, with publishers pressuring the European Union to emulate Australia’s approach.
With the prospect of more assertive regulation and even Apple questioning Facebook’s longstanding model of using data to better target advertising, the social media platform’s way of doing business faces being upended.
US legislators are voicing the loud- est concerns about Facebook, with Rhode Island congressman and Antitrust Subcommittee chairman David Cicilline tweeting that the company “is not compatible with democracy”. Congress is holding hearings this week to consider tougher antitrust measures to rein in the powers of it and other tech giants.
Australian Prime Minister Scott Morrison said he had discussed Facebook with Indian Prime Minister Narendra Modi, Canadian leader Justin Trudeau, French President Emmanuel Macron and the UK’s Boris Johnson, whose government plans to conduct antitrust probes into its operations.
Facebook has struggled to shake off deep-seated distrust since the Cambridge Analytica scandal exposed failings in safeguarding personal data. It courted fresh controversy this January when WhatsApp’s privacy policy was updated to help it share more information with its parent, leading to several lawsuits and a flood of users joining rival services Telegram and Signal.
Facebook’s abrupt move to cut off news sharing in Australia was widely criticised. But the high-stakes gambit did help it wring some concessions from the government, which announced key amendments to the planned law on Tuesday. Crucially, Facebook and Google can decide what commercial deals to cut with news publishers, and will only face forced arbitration as a last resort.
The “lesson for regulators and governments around the world is: Facebook is a formidable foe that’s willing to pull out the big guns to get what it wants”, former Facebook Australia and New Zealand CEO Stephen Scheeler said in a phone interview on Wednesday. The Silicon Valley firm has the power “to essentially undermine a government position on a topic”.
Among its other battles, the company has been hit with a lawsuit by the US Federal Trade Commission alleging a “multi-year course of illegal conduct” and anticompetitive behaviour.
The social network is involved in another thorny dispute with a rule-setting body of sorts: Apple. The iPhone maker plans changes to privacy rules on its mobile devices that will require explicit permission before software makers can collect certain data and track user activity across apps and websites.
Facebook, which relies on such information to fine-tune its ads, has been fighting the move in the public arena, taking out fullpage ads in US newspapers and presenting itself as an advocate for small businesses.
Meanwhile, the Australian legislation could serve as a global benchmark for how to force tech titans to the negotiating table and pay the traditional media for their news content.
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