The negotiation appears to be over on the question of payment by the big digital players to publishers for news.
But, as in all good deals, as prescribed by the Harvard negotiation process, did everyone get what they wanted and did they get value?
Treasurer Josh Frydenberg says there’s no doubt that Australia has been a proxy battle for the world.
“Facebook and Google have not hidden the fact that they know that the eyes of the world are on Australia,” he says.
Many argue that Facebook got exactly what it wanted with the government agreeing to change to the news media bargaining code, the coming law to force payment to publishers.
In the code now is another round of negotiation before arbitration starts and recognition of any direct deal Facebook does with the media players.
As described by Campbell Brown, Facebook’s VP, global news partnerships: “The government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation.”
And in return, Facebook says it will restore news to the platform over “coming days”.
The social media platform has already inked a deal with Seven West Media. More, just like Google has done, will follow.
The withdrawal of news from the platform is a classic follow-through negotiation tactic. No threat is effective unless you actually carry it out or you make your opponent believe that will you do it and that you don't care about the consequences.
“In Australia, Facebook just shot the hostages. (Metaphorically, of course.)” - An article in The Nieman Journalism Lab at Harvard University.
The reference is to the 1995 movie The Usual Suspects in which a gangster shoots his own family rather than be held to ransom.
Nieman Journalism Lab founder Joshua Benton characterises Facebook’s move to ban news as a response to Australia using its legal system against it.
You think you're tough? Watch this.
Benton describes Facebook’s message: “You have a really messed up idea of who finds what valuable here. Here, watch me shoot the hostages and show how illusory your ‘leverage’ really is.”
He argues that Facebook got everything it wanted out of Australia by being willing to do what the other guy (Google) wouldn’t -- pull the plug on news.
“It took less than a week for Australia to backtrack,” writes Benton.
“The mandatory arbitration that was the key to Australia’s proposed new law has been reduced to a matter of theory.
“Facebook can now decide to offer different publishers whatever amount it wants, including nothing at all, without risk of penalty.
“And Facebook retains the right to shoot more hostages whenever it likes.”
Hugh Marks, the outgoing CEO of Nine Entertainment, a media company which will benefit from deals with Google and Facebook, says that's not the way to conduct business.
"But we should look at the outcomes," he tells AdNews.
"I think, they (Facebook) wanted some changes, which were codifying the way things were operating anyway, so we're reasonably comfortable with that.
"So. I don't agree with how we got there, but the outcome I think is the right outcome, so I guess we just move forward and we'll engage constructively with a view to finalising an arrangement."
A key to the negotiation with both Facebook and Google was direct talks -- let's have an off-the-record chat to see what everyone really wants.
Treasurer Josh Frydenberg's direct calls with Facebook's Mark Zuckerberg and with executives at Google appear to have made a big difference.
Google had also made threats -- to pull its search functions from Australian users -- but in the end the digital giant started closing direct deals with publishers even before legislation forcing payment was passed by parlaiment.
These personal calls by Frydenberg proved to be a breaking point in the escalting weaponisation of the negotiations. He took a hose to the heat.
"Recognition needs to go to the treasurer. Had it not been the treasurer talking to Mark Zuckerberg, and to the chief executive of Alphabet (the parent company of Google) the week before, we wouldn’t be where we are,” says Rod Sims, the chair of competition watchdog the ACCC.
And he sees the last minute changes to the legislation as clarifcations raher than concessions to Facebook.
The point, he says, was to get the deal done.
Essentially the code has done its job, even before becoming law. "Facebook is effectively captured by the code and is responding to the code," he says.
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