On February 18, Facebook followed through on its threat to suspend major news outlets’ content from timelines in Australia, protesting a new digital platforms law. Today that law passed in parliament. Australia is forcing its two largest platforms, Facebook and Google, to compensate major media outlets for featuring their websites. While Facebook ultimately caved and a settlement to compensate media companies was reached, allowing news to return to Facebook in Australia, the scars and lessons remain. And Washington should be watching closely.
Back in August, Facebook announced it would not stand for Australia’s proposed new digital platforms law, claiming, “The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content.” Facebook’s view was not shared by the Australian Competition & Consumer Commission (ACCC). The ACCC, the regulatory body which crafted the base text for the parliamentary bill, stated back in September that, “the code simply aims to bring fairness and transparency to Facebook and Google’s relationships with Australian news media businesses.”
Not only are Australia’s motivations for the law correct, the digital platforms law itself represents the second large piece of Western technology legislation that the US could have preempted with regulation at home. In fact, this most recent case in Australia underscores that not only has the United States’ laissez-faire approach to Big Tech left Americans less safe at home given the rise of dangerous mis/disinformation, overseas the unchecked platforms are damaging American diplomatic relations and making our digital companies less internationally competitive.
Although California’s recent CCPA privacy law is of note, at a federal level, regulation of the major American platforms has remained largely in line with the botched ‘grilling’ of Facebook by Sen. Orin Hatch in 2018 – a hot mess. Facebook and other platforms have taken measures to help mitigate harmful content on their own, but it has not been enough. This is especially true of international political issues, in part because platforms like Facebook simply do not internalize the priorities the US government needs to have to protect American security.
Nowhere is this Facebook priority mismatch more evident than the broader international implications for the US government in this most recent Facebook-Australia showdown. Just read Australian Prime Minister Scott Morrison’s statement on the news ban: “I am in regular contact with the leaders of other nations on these issues. We simply won’t be intimidated.”
As an American company, the international reputational consequences of Facebook’s actions fall at Washington’s feet.
At a time when the United States is trying to insulate itself and its allies from Chinese technology companies, “intimidation” is far from an emotion to be evoked in US-Australia relations. In fact, Morrison’s statement is in stark contrast to Biden’s “America is Back” slogan trumpeted at the 2021 Munich Security Conference.
There are literal textbook examples of how US foreign policy has been previously influenced or spoken for by American commercial giants. The examples are often not good, among them the United Fruit Company and its successor Chiquita, which inspired both the phrase ‘banana republic’ and the Foreign Corrupt Practices Act of 1977.
As an American company, the international reputational consequences of Facebook’s actions fall at Washington’s feet. We know this. And yet, to date, Facebook has been sacrificing America’s diplomatic goodwill with unacceptable disregard. The US can no longer afford this behavior, especially after Trump’s degradation of US diplomacy.
Also, it’s not like ignoring Facebook’s behavior is good for American digital commerce in the long term – it’s not. Every year the US fails to institute greater regulation of platform companies, it forfeits its power to set the table. Regulatory actions are coming, no matter what the US does. It has been evidenced on privacy with the EU’s guarantees for data portability and user privacy under the General Data Privacy Regulation (GDPR) and now in Australia with its media law. Governments are instituting laws that are already needed in the US, and in so doing, they’re setting benchmarks for the rest of the world’s policy, without US interests front-of-mind.
If the US had been the one spearheading GDPR-level-privacy, for example, it could’ve omitted the clauses on locally housed data that are now a major sticking point between Google and the EU. Instead, America championed Google without domestic regulation, laying the seeds for stronger future EU competitors. Although a truly strong set of competitors in Europe have yet to arise on search, save perhaps Sneznam in Czechia, Google has been saddled by lawsuits in the EU. In fact, the argument of whether local competition is truly arising in Europe is perhaps darkly moot in that the EU appears to believe that, with each new regulatory slap, they are increasing the opportunity for competition, so lack of US regulation at a minimum has meant billions in fines hurting American companies like Facebook, Amazon and Google.
Every time America ignores the chance to take charge, the international regulatory landscape either shifts to favor a variety of empowered local competitors or wholesale pivots global standards to lie outside American interests.
I’m proud of American platform companies and the world they’ve opened up, but it’s about time Washington reckoned with the fact that these massive platforms’ truly unfettered existence is doing damage to American power. The sooner the US internalizes that unregulated platforms are foreign policy and international commercial vulnerabilities, as well as broader free-market and national security concerns, the quicker Americans can be safer and stronger on the world stage.
Thomas Klein is a Masters of Public Policy Candidate at Oxford University’s Blavatnik School of Government. Previously, Tom was an investigative analyst at K2 Intelligence and a Fulbright Grantee with the US State Department. He specializes in national security and cybersecurity policy.