He said after a brief skirmish, Facebook emerged triumphant because the changes made to the legislation — officially known as News Media and Digital Platforms Bargaining Code — would not make it necessary for the social media firm to change its business model in any way.
Federal Treasurer Josh Frydenberg announced on Tuesday afternoon that Facebook would restore news content to Australia sites after the government had made concessions which the company had demanded.
"Those subtleties are lost in the general press. What counts for the popular media is that they were able to spin some great stories around the fact that Australia stood up to the giants and that brought international attention which boosted the ego of the Australian Prime Minister Scott Morrison," Budde commented.
Facebook's vice-president of Global News Partnerships, Campbell Brown, made it very plain as to what the company had been told by Frydenberg.
In a statement, she said: ”After further discussions with the Australian Government, we have come to an agreement that will allow us to support the publishers we choose to, including small and local publishers.
"We’re restoring news on Facebook in Australia in the coming days. Going forward, 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.
"It’s always been our intention to support journalism in Australia and around the world, and we’ll continue to invest in news globally and resist efforts by media conglomerates to advance regulatory frameworks that do not take account of the true value exchange between publishers and platforms like Facebook.”
Budde said while Google had paid media companies more for deals than it would have been able to negotiate individually, "the fundamentals of why these battles are taking place are still unchanged and Facebook is also brought into the negotiation deal. However, there is no way that Facebook is going to pay any big money".
He said Google was prepared to pay extra so that its business model would survive. "It is the company’s advertising business model that it was keen to protect and for that reason, it was prepared to pay off the news companies.
"On Facebook, all media companies benefit from the distribution of their articles on its platform based on the terms of these publishers."
Budde said this meant that nothing fundamental had solved by the government through its legislation. "It [the government] is now simply waiting for the next battle and the regulator (Australian Competition and Consumer Commission) has also already foreshadowed that it will concentrate on that advertising business model.
"That will be a much tougher battle that Australia will not be able to win on its own. Google will use its full legal power with gigantic financial resources to defend their business."
He said the whole spat had illustrated the fact that the actions of individual governments were counter-productive. "The French, who took a different approach, received only a fraction of the money for its media companies than Google has paid to Australian media, so how will that make the French feel? Only united action against global digital moguls will lead to structural changes and I have mentioned some structural changes as proposed by the EU here."
Budde characterised the government's action with regard to the way Facebook distributes news as "totally wrong".
"All news organisations around the world totally voluntary distribute their news to whoever wants to use it," he explained. "Facebook is not involved in this at all. Unlike Google, it doesn’t abstract content, it doesn’t create news snippets and it does not distribute links.
"All of this is up to the news companies who are providing their services via Facebook. It is totally up to them if they provide full articles, snippets, links, send users to paywalls and so on."
While all the information blocked by Facebook could be found on the publishers' individual sites, Budde said Facebook was a well-known, integrated platform and used by a majority of Australians. Thus the organisations that provided services to the public would be the ones that suffered due to the blocking of content.
He said that enforcement of the media would have led to a ridiculous situation. "If the government wanted to stick to its media code, it would also have to force Twitter, LinkedIn and others to the negotiating table as they also would have to pay for the same service that Facebook provides. You could even argue that telephone and postal services which are used to distribute news should fall under that code - of course, [this is] totally ridiculous."
Budde said Facebook was not blameless for what had transpired. "Do I let Facebook off the hook? Totally not. But if we want to get control over the digital media and avoid the damage that they are doing to our society, economy and democracy, we need to be far more strategic and we will globally need to work together on those issues," he said.
"Ultimately the platforms have to be treated as utilities. They should be made available on a neutral basis with any organisation being able to use them without going through gatekeepers such as Google and Facebook."