Facebook Fires Warning Shot in Fight Against Australian Regulation

Here is today’s Foreign Policy brief: Facebook blocks news content in Australia, U.S. Secretary of State Antony Blinken meets with his European counterparts on Iran, and Georgia’s prime minister resigns.

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Early on Thursday morning, Australia’s Facebook users—all 17.2 million of them—found themselves caught in a battle of wills between the social media giant and the Australian government. In a warning shot ahead of the country’s proposed law that would force tech platforms to pay news organizations for sharing their articles, Facebook has indefinitely blocked users from reading or sharing news on the platform.

Whether willfully or not, Facebook also blocked the pages of some of Australia’s public services as part of the crackdown. The page for Queensland’s public health service, Canberra’s municipal government, the country’s weather service, and Facebook’s own page were all wiped and locked as part of the sweeping move.

What may have seemed trivial a decade ago has more serious implications today. About 40 percent of Australians report using Facebook as a news source. It also shows the power that Facebook has to act when it wants to—making the company’s excuses for its slow pace in countering problems like misinformation and abuse harder to take at face value.

What’s in the code? At issue is a new Australian media code, that would allow media companies to collectively bargain with tech firms to receive a slice of revenue in return for allowing news content to appear on feeds and search results. Facebook says “the value exchange between Facebook and publishers runs in favor of the publishers,” and that referrals from Facebook offset any losses media companies may incur from missing out on advertisers. The company also claims that only 4 percent of the content shared in Australia is news-related.

Facebook’s cries of innocence aren’t entirely baseless (after all, they aren’t forcing advertisers to use their service) but the rate at which it has come to dominate the digital ad market has spooked lawmakers. Taken together, Google and Facebook now account for 80 percent of the digital ad market in Australia.

Google’s play. Google, which holds an even larger share of that market than Facebook, has taken a different route. This week it announced revenue sharing agreements with Australian media giants Seven West Media, Nine, and News Corp—a major victory for Rupert Murdoch, whose media empire dominates the Australian market.

Power move. The fact that Facebook—which made more than $27 billion in the fourth quarter of 2020 alone—could easily pay whatever fees the proposed law would mandate appears to be beside the point. “What Facebook wants to do,” the BBC’s James Clayton writes, “is call the shots.”

With such a deep well of user data at Facebook’s fingertips, the company likely already knows whether the move to restrict news has had an impact on its bottom line. A bigger test will be how Facebook reacts when huge markets like the European Union, which are considering similar legislation, decide to act.

Tech backlash. As Vivek Wadhwa and Tarun Wadhwa wrote at the end of 2020, the Big Tech backlash is alive and well in the United States, too. They gave seven reasons why Silicon Valley will struggle under a Biden administration.

Blinken talks Iran. U.S. Secretary of State Antony Blinken joins his counterparts from the United Kingdom, Germany, and France today to discuss Middle East policy, with a particular focus on Iran. The meeting comes a day after German Chancellor Angela Merkel called Iranian President Hassan Rouhani to voice her “concern” over Tehran’s recent actions in breach of the 2015 nuclear deal. The ministerial meeting is timely, as Iran has threatened to limit nuclear inspections from Monday if U.S. sanctions are not lifted.

Guterres condemns vaccine nationalism. U.N. Secretary-General Antonio Guterres has condemned the “wildly uneven and unfair” allocation of coronavirus vaccines, pointing out that just 10 countries had distributed 75 percent of vaccines so far. He called on the G-7 nations—meeting this Friday—to “create the momentum to mobilize the necessary financial resources” to jumpstart a global vaccination plan.

Guterres’s comments come as the European Union opened the gap further with two new major vaccine purchases in quick succession: 300 million doses from Moderna and 200 million from Pfizer/BioNTech. EU Commission President Ursula von der Leyen said the increased supply—2.6 billion doses in total—would help the bloc to provide vaccines not only to its citizens but to “neighbors and partners” also.

Gakharia resigns. Georgian Prime Minister Giorgi Gakharia has resigned a day after Nika Melia, the chairman of the opposition United National Movement was detained on charges of organizing “mass violence” during protests in 2019. In resigning, Gakharia signaled his disapproval of a Tbilisi court decision to arrest Melia and said he hoped his decision “will help reduce polarization.” The EU envoy to Georgia Carl Hartzell said Melia’s prosecution sets the country’s democracy on a “dangerous trajectory.”

Oil prices. Saudi Arabia is set to increase oil production in April in a sign of the kingdom’s optimism as oil prices returned to pre-pandemic levels earlier this week. Saudi Arabia shouldered the majority of production cuts in January as part of an OPEC+ agreement, committing to produce 1 million fewer barrels per day in both February and March. Despite the increase in Saudi production, other OPEC+ countries are unlikely to increase production. The group next meets to decide quotas on March 4.

Scandal in Peru. Peru has been rocked by a vaccine scandal, in which nearly 500 well-connected people were given the Sinopharm coronavirus vaccine ahead of the country’s medical workers. Peru’s Foreign Minister Elizabeth Astete and Health Minister Pilar Mazzetti have both resigned in recent days after admitting to receiving the vaccine early. Former President Martín Vizcarra, who was removed by Congress in November on corruption charges, is said to have been inoculated in October while negotiating the purchase of the vaccines.

Today at 3:55 p.m. ET, a rover launched by NASA in July is scheduled to touch down on Mars, marking a busy few weeks for the Red Planet following the arrival of orbiters from China and the United Arab Emirates earlier this month. The rover, Perseverance, is tasked with searching for signs of ancient life, as well as gathering data on the planet’s geological and climate history. The rover brings with it a sign from this world, too: A 3-by-5-inch aluminum commemorative plate mounted on its left flank to honor the global medical community.

That’s it for today. 

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