Australia on Thursday passed a world-first law aimed at forcing Google and Facebook Inc. to pay for news. But after a forceful intervention from the world’s biggest social network, the reality is Silicon Valley’s titans are paying a small price for cementing their influence over the media industry.
In a high-stakes gambit, Facebook blocked the sharing of news links in Australia and from Australian publishers, sapping traffic to their websites and putting pressure on the government to soften its proposed legislation. Lawmakers did exactly that, and while it’s too early to declare a clear winner from the confrontation, Facebook is walking away satisfied that it didn’t have to cede too much ground.
The last-minute compromise means Google and Facebook have avoided what they feared most — forced arbitration that would dictate how much they pay publishers. Instead they get to choose which commercial deals to pursue, and will only face arbitration as a last resort.