It’s hardly a surprise that Meta, owner of Facebook, is refusing to renew its deals with Australia’s media companies. It was always grudging in its negotiations and never really accepted the principle that it should pay for the benefit of using the work of journalists.

Facebook and Google were forced to the bargaining table by the news media bargaining code. That law allowed the government to “designate” digital platforms, which would force them to negotiate with media companies.

The big stick was that if the parties could not agree, the decision would be made by an independent arbiter. In other words, Google and Facebook would lose control.

In 2021, after a few hissy fits, Google and Facebook avoided designation by cutting deals outside the legislation. These deals, mostly for three years, were worth an estimated $200m for news media companies. More journalists were hired and more journalism was done as a result.

But there was always the risk it would be a sugar hit, rather than a path to sustainability.

The news media bargaining code and the deals that followed were political more than commercial.

Google and Facebook always argued that the commercial benefit of their use of news content flowed principally to the media organisations – and that there was therefore no justification for them to have to pay. When the Australian Competition and Consumer Commission asked them for evidence to back this up, “little useful information was forthcoming”, according to the then ACCC chairman, Rod Sims.

The real value of news media content to digital platforms like Google and Facebook has never really been tested.

But, with the support of all the media companies, including the mighty News Corp, the government had the political will to pass the law and force a result.

Facebook was also always more grudging than Google, cutting fewer deals and notably failing to reach agreement with smaller outlets such as SBS and The Conversation.

But it avoided designation, deals........

© The Guardian