Facebook will restrict publishers and users in Australia from sharing or viewing Australian and international news content as the Parliament there debates a law that would force tech and social media platforms – namely it and Google — to pay more for journalism on their sites.
The announcement came shortly after Rupert Murdoch’s News Corp said it had carved out a three-year deal with Google to provide journalism from its news sites around the world, including Australia where the publisher has its roots, in return for what it called “significant payments” by the Internet giant.
Taking a different tack in the brewing news storm, William Easton, Managing Director, Facebook Australia & New Zealand, said Australia’s proposed law “fundamentally misunderstands the relationship between our platform and publishers who use it to share news content. It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter.”
(In its announcement earlier Wednesday, News Corp. thanked the Australian Competition and Consumer Commission, Australian Prime Minister Scott Morrison and Treasurer Josh Frydenberg, who “have stood firm for their country and for journalism.”)
Australia has taken the hardest line of any country so far with the legislation that would force digital platforms to negotiate with media companies on payment for using their news. The new law would require binding arbitration if the two sides failed to reach a deal. It would also require tech platforms to give publishers collective bargaining power and give them notice of any algorithm changes that would materially affect traffic.
“We were prepared to launch Facebook News in Australia and significantly increase our investments with local publishers, however, we were only prepared to do this with the right rules in place. This legislation sets a precedent where the government decides who enters into these news content agreements, and ultimately, how much the party that already receives value from the free service gets paid. We will now prioritise investments to other countries, as part of our plans to invest in new licensing news programs and experience,” Easton wrote.
He drew a distinction between the Mark Zuckerberg-led Facebook and Google “and why the platforms may respond differently.”
“The answer is because our platforms have fundamentally different relationships with news. Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content. On the other hand, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue,” he wrote in a company blog post.
He said Facebook has “made clear to the Australian government for many months, the value exchange between Facebook and publishers runs in favor of the publishers — which is the reverse of what the legislation would require the arbitrator to assume. Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.” But for Facebook, he said, the business gain from news is “minimal,” making up less than 4% of the content people see in their News Feed.