FILE PHOTO: Facebook Founder and CEO Mark Zuckerberg speaks on stage during the annual Facebook F8 developers conference in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam/File Photo
FILE PHOTO: Facebook Founder and CEO Mark Zuckerberg speaks on stage during the annual Facebook F8 developers conference in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam/File Photo
FILE PHOTO: Facebook Founder and CEO Mark Zuckerberg speaks on stage during the annual Facebook F8 developers conference in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam/File Photo
FILE PHOTO: Facebook Founder and CEO Mark Zuckerberg speaks on stage during the annual Facebook F8 developers conference in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam/File Photo

Technology

Facebook blocks news content in Australia as it blasts proposed law

New legislation will mean Facebook and Google have to pay news publishers for content

Soraya Ebrahimi
Soraya Ebrahimi

February 18, 2021

  • English
  • Arabic

Facebook has blocked news reports from its feed in Australia, drawing a line against a proposed law that would require it and Google to pay news publishers for content.

Starting on Wednesday, Australian users are not able to read or share news content on Facebook feeds, and Australian publishers are restricted from posting or sharing content on Facebook pages.

The move, announced in a blog post on Wednesday, is a new response among tech giants under attack by news publishers, which have blamed them for destroying their advertising business.

The Australian government has said it plans to put the legislation, which effectively forces Google and Facebook to strike deals with media companies or have fees set, to a vote in coming weeks.

"If it is not already clear, Facebook is not compatible with democracy," David Cicilline, the chairman of the US House of Representatives' powerful subcommittee on antitrust, commercial and administrative law, said, following Facebook's move.

"Threatening to bring an entire country to its knees to agree to Facebook's terms is the ultimate admission of monopoly power."

Google also threatened to shut down its search engine in the country to avoid "unworkable" content laws, even as it has secured deals with publishers in the UK, Germany, France, Brazil and Argentina for its Google News Showcase product.

On Wednesday, Google reached a landmark global deal with Rupert Murdoch's News Corp, owner of The Wall Street Journal  and two thirds of Australia's major city newspapers, to develop a subscription platform and share advertising revenue.

Facebook said the planned legislation "fundamentally misunderstands" the relationship between itself and publishers.

It said news outlets voluntarily posted their article links on Facebook, which helped Australian publishers to earn about A$407 million ($315.5m) in 2020 through referrals.

Emily Bell, director of the Tow Centre for Digital Journalism at Columbia Journalism School, tweeted on Wednesday that the relationship was not as voluntary as it seemed, and most publishers felt obliged to be on Facebook because of its dominance.

Facebook, which has long been criticised for allowing misinformation on its platforms, is now in the peculiar position of also blocking the news media that provided fact checks on false content.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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