Facebook To Bar News Sharing In Australia If It Signs A New Law Mandating Payment To Publishers For Use Of Their Stories

Facebook has threatened to block Australian publishers and individuals from sharing news stories on its platform if the country passes a law allowing media organizations to demand compensation for its use of their stories, AP reported.

In July, Australia announced a proposal that would mandate Facebook and Alphabet Inc.’s Google to negotiate with media companies over payment. If the sides couldn’t agree, an independent arbitrator would resolve the dispute and finalise the compensation.

The social network behemoth has argued that Australian measure would force it to pay arbitrary and theoretically unlimited sums for information that makes up only a small fraction of its service. It said that news represents a fraction of what people see in their Facebook feeds and that news isn’t a significant source of revenue for the company. Despite news featuring low in its monetising model, Facebook said that it has offered to invest millions of dollars in Australian news businesses and wants to support struggling news organizations.

In a blog post, the company’s managing director for Australia and New Zealand, Will Easton wrote that the measure would force Facebook to choose between “either removing news entirely or accepting a system that lets publishers charge us for as much content as they want at a price with no clear limits,”. He also added that no business can operate that way.

Easton said that Facebook supported Australian Government’s goal of helping struggling news organisations, particularly local newspapers, and have engaged extensively with the Australian Competition and Consumer Commission that has led the effort. He said that the proposed law is counterproductive to that goal.

“The proposed law is unprecedented in its reach and seeks to regulate every aspect of how tech companies do business with news publishers. Most perplexing, it would force Facebook to pay news organisations for content that the publishers voluntarily place on our platforms and at a price that ignores the financial value we bring publishers.“ Easton stated.

Warning that removing news sharing could hurt publishers, Eaton noted that in the first five months of 2020, the platform sent 2.3 billion clicks from Facebook’s News Feed back to Australian news websites at no charge – additional traffic worth an estimated $200 million AUD to Australian publishers.

Australian Treasurer Josh Frydenberg said the proposed laws would “create a more sustainable media landscape and see payment for original content.”

“Australia makes laws that advance our national interest. We don’t respond to coercion or heavy handed threats wherever they come from,” Frydenberg said, referring to the Facebook threat.

Media companies in Australia have generally supported the proposed regulations, saying they will prevent social-media giants from walking away from negotiations over payment.

If the proposed bill is voted as a law, Australia will be first country that will be legally forcing the social media companies to compensate media businesses for news content.

A public consultation period ended last week and and final legislation could be introduced in Parliament soon.