Australia’s looming confrontation with big name tech players has erupted into the open, after Facebook banned Australian users sharing local and international news on its platforms (including Instagram).
Facebook last September had bluntly warned it would do precisely this, if the Australian government pressed ahead with a rule change, that will legally force tech firms such as Facebook and Google, to pay local publishers for news and other content they utilise, or even link to, on their platforms.
If the parties cannot reach an agreement, a government-appointed panel will decide on the price. The scheme has been strongly opposed by both Google and Facebook, with Google last month warning the Australian government that it could remove its search engine from Australia over the matter.
But now Facebook has followed through on its warning, and William Easton, MD of Facebook Australia & New Zealand explained the reasons in a detailed blog post.
“In response to Australia’s proposed new Media Bargaining law, Facebook will restrict publishers and people in Australia from sharing or viewing Australian and international news content,” wrote Easton.
“The 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.”
Easton explained that Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content.
However, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue.
“In fact, and as we have made clear to the Australian government for many months, the value exchange between Facebook and publishers runs in favour of the publishers – which is the reverse of what the legislation would require the arbitrator to assume,” said Easton. “Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million (£227m).”
“For Facebook, the business gain from news is minimal,” wrote Easton. “News makes up less than 4 percent of the content people see in their News Feed.”
“Over the last three years we’ve worked with the Australian Government to find a solution that recognizes the realities of how our services work,” wrote Easton. “We’ve long worked toward rules that would encourage innovation and collaboration between digital platforms and news organisations. Unfortunately this legislation does not do that. Instead it seeks to penalise Facebook for content it didn’t take or ask for.”
Easton said that the platform was prepared to launch Facebook News in Australia, and will significantly increase its investments with local publishers.
However it is 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,” wrote Easton. “We will now prioritise investments to other countries, as part of our plans to invest in new licensing news programs and experiences.”
“Unfortunately, this means people and news organisations in Australia are now restricted from posting news links and sharing or viewing Australian and international news content on Facebook,” said Easton. “Globally, posting and sharing news links from Australian publishers is also restricted.”
“Our global commitment to invest in quality news also has not changed,” wrote Easton. “We recognise that news provides a vitally important role in society and democracy, which is why we recently expanded Facebook News to hundreds of publications in the UK.”
“We hope that in the future the Australian government will recognise the value we already provide and work with us to strengthen, rather than limit, our partnerships with publishers,” said Easton.
It should be noted that the US Government has also asked Australia to halt the incoming legislation.
Australian Prime Minister Scott Morrison, despite being warned by the social networking giant last year that it would do this, has said his government will not be intimidated by Facebook blocking news feeds to users.
“Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing,” Prime Minister Scott Morrison was quoted by Reuters as writing on his own Facebook page, using the vernacular for cutting ties with another person on the site.
“These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of Big Tech companies who think they are bigger than governments and that the rules should not apply to them.
News Corp will provide premium content for the Google News Showcase offering, in return for “significant payments” from Google.
Earlier this week Google also agreed to pay $76 million (£55m) to French news publishers under the terms of a deal struck last month to end a copyright dispute.
But if the Australian legislation proves too onerous for Google in Australia, it could also follow through on its threat to remove its search engine from that market.
It should be remembered that Google shut down its Google News service altogether in Spain back in 2014, when Spain required news aggregators (such as Google) to pay for a license to use news content.
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