Politico

Facebook just handed its critics in Washington a lot more ammunition


Facebook CEO Mark Zuckerberg has said for years that governments should set rules for the internet. Now his Washington critics say the company’s news blackout in Australia proves he didn’t mean it.

The company blocked all news content for users in Australia this week in the face of a proposed law that would force it to pay news publishers for displaying their content. The move provided instant fodder for those in the U.S. who say Facebook is too big, too powerful and verging on ungovernable — the very concerns that prompted federal and state regulators to launch an antitrust suit against the company late last year.

Sen. Mark Warner (D-Va.) called the move “an unacceptable bullying tactic that only underscores concerns with their market dominance.” Warner has called for Facebook to take more responsibility for posts and ads on its 2.7-billion-member platform.

“It’s worrisome that large tech companies — which routinely tell policymakers they acknowledge the need for regulation — continually resort to using their large scale and dominance to undermine democratically adopted laws,” Warner said in a statement.

That kind of reaction could be particularly damaging for Facebook as it faces increasing scrutiny from lawmakers over both antitrust allegations and how it handles user content. On Thursday, the House antitrust subcommittee announced the latest step in its long-running investigations into the tech industry — a series of hearings to consider new antitrust laws. That same day, the House Energy and Commerce Committee announced it is pulling in Zuckerberg, Google CEO Sundar Pichai and Twitter CEO Jack Dorsey to testify next month about misinformation on their platforms.

“That the whims of Mark Zuckerberg are so consequential for an entire country helps underscore the stakes in taking on Facebook and Google, while that is still possible,” said Jeff Hauser, director of the advocacy group Revolving Door Project, which has been critical of Facebook’s political power.

He argued that Australia’s move could provide momentum to the U.S. effort against the company.

“If a country with a population less than one tenth of ours can fight back against Facebook, why can’t the USA?” Hauser asked.

The Australian law would require online platforms to pay fees to news publishers whenever their content appears on the tech companies’ sites, either shared by users or by the news organizations themselves. The prices would be set either by negotiations between the companies or through an arbitration body.

Google, the other tech behemoth facing an ongoing federal antitrust suit in the U.S., took a different approach to the Australian development. It signed a global agreement this week to pay News Corp. an undisclosed amount for its content it will showcase in a new specialty news product. The company said it has also signed partnerships with more than 500 news organizations globally and is in talks with others.

In response to Facebook’s Australia decision, House antitrust subcommittee Chair David Cicilline (D-R.I.) tweeted: “Facebook is not compatible with democracy. Threatening to bring an entire country to its knees to agree to Facebook’s terms is the ultimate admission of monopoly power.”

A Facebook spokesperson declined to comment for this story.

While Zuckerberg has repeatedly called for “a more active role for governments and regulators and updated rules for the internet” — a message it spreads in an endless roster of online ads and sponsored content — Facebook argues that the Australia case is unique.

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” Will Easton, Facebook’s managing director for Australia and New Zealand, wrote in a company blog post. Easton argued that publishers eagerly opt to share their journalism on Facebook to make use of the platform’s enormous reach around the world.

Not even all Facebook’s Washington critics are convinced that Australia’s elected leaders are in the right, or that the law’s proponents are all engaged in a noble quest.

“I don’t necessarily think the Australian approach is the best route,” Warner said. Many observers say the law would mainly benefit News Corp., the Rupert Murdoch-founded behemoth, which has long been on what its CEO, Robert Thomson, has called a “quixotic quest” to bring Facebook and Google to heel.

Critics of the Australian law say paying for links violates one of the building blocks of the internet. Mike Masnick, editor of the widely read site TechDirt, said Australia’s proposal “should concern basically anyone who supports a free and open internet.”

As for Facebook’s support for government oversight, the company has largely limited its calls for more regulation to four discrete areas that it calls harmful content, election integrity, privacy and data portability — none of which are at issue in Australia.

Still, people pressing for more checks on Facebook say the real worry is what looks like an attempt by the $700-billion company to force a government’s hand.

Canadian minister Steven Guilbeault, whose portfolio includes tech, said Thursday that the company’s handling of the Australian situation was “highly irresponsible.” Guilbeault added that legislation addressing what he called “fair compensation” for news organizations, drawing in part on the Australian bill proposal, will soon be introduced in that country.

European Commission President Ursula von der Leyen echoed the concerns about Facebook’s power play, saying during remarks Friday at the Munich Security Conference that decisions “that have huge impacts on our democracies” shouldn’t be left up to “computer programs without any human supervision or to boardrooms in Silicon Valley.” She added, “The latest decision by Facebook regarding Australia is just another proof for that.”

Back in the U.S., Judd Legum, another frequent Facebook critic and author of the newsletter Popular Information, argued that the company is employing a clear pressure tactic by pulling news in Australia even before the bill has passed.

His take: “It’s an attempt to bully the Australian government into not passing the law.”

Laurens Cerulus and Andy Blatchford contributed to this report.

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