Facebook threatens to ban news sharing in Australia if proposed law gets approved

Facebook users in Australia may be barred from sharing news content on their devices if the federal government succeeds in its plan to make the digital giant pay for the news it publishes.

In April, the government pushed the national competition watchdog Australian Competition and Consumer Commission (ACCC) to develop a mandatory code of conduct addressing the bargaining power imbalance between traditional news media organisations and the world’s largest digital platforms.

This imbalance has resulted in news media businesses accepting less than favourable terms for the inclusion of their news on digital platform services.

The draft code was released in July to give Australian news media businesses the capacity to negotiate individually and collectively with digital outlets over payment for the inclusion of news on their services.

Businesses would be able to ‘opt out’ of having their news content featured on individual digital platform services against their will and would potentially have more control over user comments made against stories they post or publish to digital platform services.

Initially, the code would apply only to Facebook (including Instagram, which Facebook bought out in 2012 for $1.35 billion) and Google as these organisations are perceived to control the balance of bargaining power in the Australian market.

Media response

Initially, the plan was for a voluntary code between social media platforms and news media companies, but with COVID-19 accelerating a downturn in advertising and revenue for news businesses, the government opted for a mandatory code to “level the playing field” for the news media industry and ensure its viability.

The nation’s largest news organisations have been quick to throw their support behind the proposed law.

Not long after the government first announced the idea, Nine Network and News Corp Australia voiced their support, saying it was “time for the big platforms to take some responsibility for the hold they have over the Australian publishing industry”.

Seven West Media also approved, with chief executive officer James Warburton calling it a “welcome move on a critical issue”.

“The media industry is dependent on the value of its content being recognised by all users – foreign digital platforms in particular,” he said in April.

“In the past month, our news content alone has reached millions of Australians [and] it is only right that when this is accessed via third party platforms its creators are fairly compensated.

“We fully embrace the opportunity to work closely with the government and the ACCC to implement this long-awaited action,” Mr Warburton said.

Saturation advertising

Not surprisingly, the digital giants have not been so supportive.

Google has used saturation advertising since earlier this year to encourage users to fight against the proposed changes.

The company has argued, among other things, that free services could be at risk due to the regulation, and that YouTube content creators could earn less because news media would be advantaged.

YouTube is currently excluded from the draft code.

Google has confirmed it is already paying Australian news media “millions of dollars and sending them billions of free clicks every year”.

“We have offered to pay more to licence content but rather than encouraging these types of partnerships, the law is being set up to give big media companies special treatment,” it said in an open letter to the Australian community.

Status update

This week, Facebook issued an update on its status regarding the draft code, threatening to make it impossible for users in Australia to share local and international news content on Facebook and Instagram if the law comes into effect.

The $528 billion company said Australia had left it with two choices – removing news entirely or accepting a system which lets publishers charge it for maximum content at a price with no clear limits.

It said banning Australians from sharing news content across its platform would be the appropriate response.

“Assuming this draft legislation becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram,” the company stated.

“This is not our first choice – it is our last… but it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector,” it added.

Ill-timed and misconceived

The ACCC was swift to pour cold water on the Facebook flames, calling the announcement ”ill-timed and misconceived” and pointing to the tech giant’s role in spreading important information during a global pandemic.

“Facebook already pays some media for news content… this code simply aims to bring fairness and transparency to Facebook and Google’s relationships with Australian news media businesses,” it said.

According to the ACCC’s own estimates, for every $100 spent within Australia’s digital advertising space, $47 goes to Google and $21 to Facebook, leaving the remainder to be spent across all other Australian websites.

Heavy-handed tactics

Federal treasurer Josh Frydenberg was less diplomatic towards the Facebook threat.

“Australia makes laws that advance our national interest and we won’t be responding to coercion or heavy-handed tactics, wherever they come from,” he said.

“We want a sustainable media environment and key to that is to seek payment for original journalistic content.

“We are committed to these reforms – we won’t be bullied, no matter how big the international company is, no matter how powerful they are, no matter how valuable they are,” Mr Frydenberg said.