Facebook and Google are basically the filters through which more than 85% of people view the Internet. This has made the companies very wealthy as the Internet has grown much bigger than expected and seems likely to continue expanding. It also gives them a massive amount of power which draws scrutiny from the public and politicians.
The latest entanglement is in Australia where a law is being discussed that would require platforms like Google and Facebook to pay for links to news outlets.
Facebook Bans News Sharing
Facebook faced backlash after banning news sharing in Australia on its platform. The company is in a dispute with Australia following that country's proposal of a law which requires Google and Facebook (Nasdaq: FB) to pay for links to news outlets. Pages from domestic and news organizations were wiped out as well as Australian government and charity pages. The company drew even more criticism as it was three days before the launch of a nationwide COVID-19 vaccination program.
Many saw it as Facebook warning other countries that there would be a penalty to implementing similar measures. For others, it validates concern that too much power is held by the Big Tech companies.
Facebook said the banning of government and public information pages was an error. Some in the tech industry defended Facebook by saying that no platform or publisher pays for news article links. The decision also draws scrutiny about its monopoly power as 21% of Australians received their news from Facebook.
Google Makes Deal With News Corp
Google (Nasdaq: GOOG) is taking a much different approach than Facebook. It's made deals with Australia's major publishing companies, including News Corp (NYSE: NWS.A) to pay for content.
Facebook has attracted severe attention from critics in the country. Blocking publishers also led the social media giant to inadvertently block websites offering public information about emergencies, fires, and weather. Many also said that Facebook banning news websites from its platform means that the void will be filled by conspiracy websites and/or other types of disinformation.
At one point, Google was also taking a more adversarial stance as it had threatened to shutdown its search engine in the country. However, Google changed course and is featuring News Corp websites on its News Showcase product which lets publishers promote their stories.
Google has made similar arrangements with other publishers in various countries. Google has set aside $1 billion for such deals worldwide over the next three years. Apple (Nasdaq: AAPL) has also been paying news publishers who participate in its Apple News Plus service.