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Why Facebook defied the government’s wishes while Google buckled

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What’s the difference between Google and Facebook?

One difference is that in the past week Google more or less agreed to pay some Australian news outlets for their content, faced with the threat of government action to force it to.

Facebook did not, temporarily removing Australian news sources from its feeds — a decision it has now reversed after getting a range of concessions from the government.

Another is the reason why: It’s that Google faces competition, whereas Facebook really doesn’t.

In economists’ language, that’s because Facebook enjoys a rare “network effect“, Google scarcely at all.

If I want to switch from Google to another search engine (something I’ve done) it costs me next to nothing. I might find it hard to move my search history over (although there’s probably an app for that) but otherwise the new search engine will either be better, worse or about the same as the one I left. I’m free to find out.

Google faces competition

It means that Google is forced to defend itself from competition (or the threat of competition) by providing an extraordinarily good service.

Not so Facebook. Although a relatively new concept in economics, the idea of a network effect dates back to at least 1908 when the president of the American Telephone and Telegraph Company, Theodore Vail, spelled it out in a letter to stockholders.

“A telephone, without a connection at the other end of the line, is not even a toy or a scientific instrument,” he wrote. “It is one of the most useless things in the world. Its value depends on the connection with the other telephone — and increases with the number of connections.”

A photo from 1958 showing a row of women wearing headsets, seated before a large manual telephone exchange

Like a telephone network, social media only works if everyone’s connected.(Supplied: Margaret Moller)

Facebook faces hardly any competition

The idea has since been expressed in a mathematical formula, but there’s no need to get into details.

The world’s first telephone was indeed useless, the second allowed one household to reach only one other. But by the time there were millions, and almost every household had one, each telephone became incredibly valuable, allowing that household to reach almost every other household.

A start-up that tried to compete with the phone system would be offering a very unappealing product. It wouldn’t be able to offer anything like the connections of the existing system until a huge proportion of the population signed up, meaning people would be reluctant to sign up, meaning it would stay unappealing.

Which is the point Vail was making. When it gets big enough, the telephone service is something close to a natural monopoly. There’s no point in anyone setting up a competing one (and in Australia we haven’t: the competing companies — Telstra, Optus and so on — share the one network).

The ASX stock exchange is another example, as is eBay. You could try to sell something on a different platform, but you wouldn’t reach nearly as many potential customers, so you mightn’t get as good a price.

The Australian Competition and Consumer Commission puts it this way in its report on Facebook: even if the government made it easier for a user to switch to another network, perhaps by mandating the transfer of data, “if none of the user’s friends or family are moving away from Facebook, that user would be unlikely to switch platforms.”

The “lock in” that happens when a network gets so big people feel they have to use it means it doesn’t have to treat them particularly well to get them to stay.

Seventeen million Australians use Facebook every four weeks — a huge proportion of the population, and an even bigger proportion of the population aged over 14 (80 per cent).

Without Facebook, it would be hard to know what family and friends and long-lost classmates are up to — whether or not Facebook offers news. It doesn’t need to treat its users particularly well to get them to stay.

Mina Guli stands at an old telephone, during a stop in the Simpson Desert, South Australia.

Networks only work when everyone is on them. When they are, they have immense power.(Supplied)

Facebook isn’t quite like the phone system. Young people find the fact that so many old people can use it to check up on them a turn-off and go elsewhere. But for the Australians already on it (that’s most Australians) it’s worth staying.

And there’s room for smaller specialised networks.

Linkedin has its own network for people concerned about the jobs market. If that’s the world you’re in, it’s wise to be on it because of the huge number of other such people who are on it. There’s not much point leaving it for something else.

Winner takes all

It wasn’t always that way for Facebook. Fifteen years ago MySpace was how people connected, but not that many of them — it hadn’t grown to the point where network effects took over. When they did, there could be only one clear winner, and it happened to be Facebook.

Now, not even its bad behaviour (Roy Morgan finds it is Australia’s least-trusted brand) can stop most people using it.

In the same way as people who want the lights on generally have to use the electricity company, people who want to catch trains generally have to use the railway and people who want to drive cars generally have to buy petrol, people who want to stay in touch generally have to use Facebook.

Which makes the government’s decision to remove its vaccination advertising campaign from Facebook silly. Facebook reaches 80 per cent of its target audience.

Facebook has become a (trans-national) utility, unconcerned about its image. Attempts by one government, or even a coalition of governments, to force it to do anything are pretty much a lost cause.

No one wanted it to be like this, and it’s not like this for Google. Facebook has moved beyond our control.

Peter Martin is visiting fellow at the Crawford School of Public Policy, Australian National University. This article originally appeared on The Conversation.

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Hopes Google, Facebook deals will underpin a rise in journalism jobs

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“We have seen no guarantees from the big media companies that money raised from the digital platforms will be spent on journalism,” said MEAA Media federal president Marcus Strom said last week.

“If some of this the Facebook and Google’s massive Australian revenue is now to be returned to media companies, there must be a corresponding commitment that the money is spent on news content, not dividends or corporate bonuses. The media companies must provide transparency about how they intend to allocate these funds.“

There are signs at least some companies are already progressing with plans to do just that despite challenging market conditions.

Guardian Australia is expected to take another floor in its Surry Hills office for new employees while industry sources have indicated News Corp Australia, owner of The Australian, The Daily Telegraph and The Herald Sun, is considering hiring almost 100 journalists with the money. News Corp declined to comment.

National broadcaster the ABC has not yet signed any deals with Google or Facebook but has pledged it will use the money to invest in regional journalism.

But Nine, which owns television, radio and newspaper assets (including this masthead) has been less explicit. A spokesperson for Nine referred back to comments made publicly by chief executive Hugh Marks.

Mr Marks said at a Senate inquiry more than one week ago that if funding from tech giants wasn’t secured, job losses at Nine’s publications would continue.

Following the company’s half-year financial results last week, Mr Marks indicated the company would consider hiring new journalists. “You won’t be able to say a dollar here goes to $1 there but you can look at that business and say it’s a strong viable sustainable publishing business that will be able to support journalism going forward,” he said.

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“If there are opportunities for us to employ more journalists to get a positive result then we will do that. But it certainly underpins the future of journalism in this market.”

Seven West Media chief executive James Warburton said most of the money the company expects to gain from its deals with Google and Facebook will be used for Perth based newspaper The West Australian and its regional titles. He initially said the cash would be dropped to the bottom line and be used for repayment of debt but now says it will be focused on improving the newspapers’ digital strategy.

Seven’s deal also has a YouTube component, which means some of the money will be spent on television content.

“It will support quality journalism in metropolitan, regional and community markets and underpin the digital strength and sustainability of our news businesses going forward,” Mr Warburton said.

Industry sources who are familiar with the various agreements have said that some publishers have an audio component – which requires them to invest a large amount of money in areas such as podcasting. Other companies will use the money for distribution strategies to build their digital audiences.

For smaller outlets like Junkee, the money will provide an important backbone for the business to continue its work.

“We haven’t made any definitive decisions yet about how we’ll spend the money, but this moment presents a unique opportunity for us to invest in public interest journalism,” Junkee’s editorial director Rob Stott says. “We’ll be looking at a mix of original reporting and background infrastructure that will make Junkee a more sustainable operation into the future. I’m extremely excited about the potential for this funding to make a real difference to the breadth and depth of content we produce.”

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Facebook banned my perfectly harmless article – and I think I know why

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You start by excluding fascists, anti-vaxxers and conspiracists. You end by banning pretty much anyone you disagree with. In recent months, Facebook has taken to labelling as fake, or removing altogether, a number of stunningly inoffensive pieces: a study by the American researcher Dr Indur Goklany claiming (quite correctly) that the number of people dying globally as a result of natural disasters was falling; a column by the investigative journalist Ian Birrell questioning whether the WHO had been too hasty in ruling out the possibility of a Wuhan leak; a report by the leading Oxford epidemiologist, Dr Carl Heneghan, of a Danish study arguing that facemasks made little difference to the spread of Covid-19.

And, now, an article of mine. Last week, I wrote a piece for the John Locke Institute (JLI), a high-minded organisation that runs summer schools and seminars, mainly for sixth-formers, offering in-depth tuition in the humanities subjects. I advanced the view that the epidemic had made us more collectivist, and that the post-lockdown world would be relatively authoritarian. The JLI bought advertising on Facebook to promote the piece. Facebook first authorised the advertisements, then pulled them without explanation.

In my case, as in all the others, it is impossible to know what the offence was. None of the pieces was making tendentious claims, let alone promoting conspiracy theories. Since Facebook offers neither explanations nor an open appeals process, we can only guess.

Are algorithms set in such a way as to screen out Right-of-centre opinions? Are they overseen by people with an explicit agenda? Is Facebook responding to pile-ons by woke activists? Is the real objection not so much to the content as to the authors?

I suspect the last. A few weeks ago, Think Scotland, a Unionist website, tried to advertise two articles critical of Nicola Sturgeon. Facebook said no on the bizarre grounds that they violated its “Vaccine Discourager” guidelines. The editor, Brian Monteith, suspecting that Facebook was being pressurised by Cybernats, experimentally tried to advertise a wholly unpolitical article about a young mother potty-training her daughter. It, too, was rejected. Eventually, after a campaign mounted by Toby Young’s Free Speech Union, Facebook backed down.

For what it’s worth, I take the view that Facebook, as a private company, can run whatever adverts it likes. But let’s be absolutely clear that it is now a publisher – a publisher with an agenda. Any notion that Facebook (or Twitter, or YouTube) is simply a platform has gone. It is one more opinionated channel, alongside Fox News, Russia Today, the BBC and the Morning Star.

What is most interesting is not the fact that Facebook has its biases – we all have biases – but what those biases are. Bizarrely for a company that was originally meant to facilitate the free flow of ideas, it has become intolerant of dissent – or, at least, of certain forms dissent. You generally won’t get into trouble for denying Stalin’s crimes, boycotting Israel or celebrating Margaret Thatcher’s death. But question whether there is excessive use of state power in enforcing lockdowns or reducing carbon emissions and you may be excluded.

Indeed, we seem to be reaching the point where simply to call for free speech is becoming dangerous. To the extent that the JLI can be said to have a collective view on anything, it believes in heterodoxy. Its founder, a former Oxford academic called Martin Cox, ensures that his summer schools and seminars hear a range of views from top lecturers, and encourages his students to engage with ideas that might initially repel them. That is, if you think about it, the essence of liberalism.

The article of mine which JLI ran, the one Facebook found intolerable, was not about Covid-19 or public health. It was about the fragility of an open society, the way a shared threat can throw people back on their tribal instincts, and the consequent likelihood that powers seized by governments on a supposedly contingent basis in 2020 won’t be relinquished when the epidemic passes.

Any organisation that sees such opinions as unacceptable is – there is no other way to put this – hostile to liberty.

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Tragic reason why man tried to live stream death on Facebook

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A man who threatened to live stream his own death on Facebook after he was denied euthanasia despite a viral campaign now plans to travel to Switzerland to end his life.

Alain Cocq, 57, who suffers from a disease that is so rare that it does not even have a name, says he is in a permanent state of suffering.

His case went viral in September 2020 when he threatened to live stream his death on Facebook if French President Emmanuel Macron did not change the country’s laws to allow for assisted dying.

He had to give up on his project after Facebook cut the feed, but he is still advocating for changes in law and has now decided to go to Switzerland to be able to benefit from euthanasia there.

He is applying to the authorities in the Swiss capital Berne and he hopes to receive a positive response in the coming months, if not weeks.

Alain Cocq is now travelling to Switzerland after he was denied euthanasia. Source: Newsflash/Australscope

Alain Cocq is now travelling to Switzerland after he was denied euthanasia. Source: Newsflash/Australscope

Cocq suffers from a rare form of disease that has been described as being similar to ischaemia, which is when a restriction in blood being supplied to live tissue causes an oxygen shortage that damages the tissue and can cause dysfunctions.

There is no cure for his condition, which will, very slowly, prove fatal.

“I want end of life to become the primary theme of the presidential elections in 2022,” he told local French newspaper 20 Minutes.

Despite his appeal to the French president in September, President Macron said he was “unable to accede to his request” despite the “profound respect” he had for him.

The retired plumber, who has been ill for 34 years, is hoping the Swiss will help him end his life after a failed attempt with the European Court of human rights in 1993 and a first petition to the French government in 1994.

At the time, he was still in a wheelchair, but after that numerous cardiovascular and cerebral accidents rendered him permanently bedridden.

Australscope

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