If Australia’s new News Media Bargaining Code becomes law, Facebook plans to block Australians from sharing news on Facebook and Instagram. It is taking this stance in reaction to an Australian measure that could require tech giants like Google and Facebook to pay local media for their content.
Australia’s News Media Bargaining Code
In April 2020, the Australian Government asked the Australian Competition & Consumer Commission (ACCC) to develop a news media bargaining code. The purpose of this code is to “address the fundamental bargaining power imbalance between Australian news media businesses and major digital platforms”.
The draft code was released for public consultation on 31 July 2020. All interested parties had to provide their views by 28 August 2020. Final legislation is expected to be introduced to Parliament within the next few weeks. Initially, the code will apply only to Facebook and Google.
In short, the code would allow Australian media businesses to secure “fair payment for news content”. The measures would also give them more control over their stories and user comments. In other words, Google and Facebook would be required to pay for news they display and acknowledge the intellectual property rights of the content creators. Parties have three months to negotiate revenue-sharing deals. After that, news media businesses can elect to commence arbitration.
Facebook to Block News Sharing
Yesterday, Facebook’s managing director, Will Easton, said in a company blog post that Facebook would “reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram”. Will Easton emphasized that this would not be Facebook’s first choice. On the contrary, he sees it as the only possible way to react to a set of measures that “defy all logic”.
According to Facebook, the ACCC does not understand the relationship between digital platforms and news media. In their view, publishers benefit more from Facebook than the other way around. From January to May alone, for example, Facebook had sent 2.3 billion clicks from Facebook’s News Feed back to Australian news websites “at no charge”.
Facebook says they also hope to introduce Facebook News in Australia. This is a separate section on Facebook where users can find and read news from participating news publications. The social media company pays publishers to feature their content in this dedicated news tab.
Google Finds New Code “Unworkable”
Earlier this month Google published an open letter about the proposed mandatory code. Furthermore, they have added a pop-up to the Google Search home page warning Australians that “the way Aussies use Google is at risk”. Google explained that they are not against a law that fosters the relationship between media and digital platforms, but claims that the current draft code is “unworkable”.
Google is especially against a part of the legislation that would require them to disclose algorithm changes to publishers no less than 28 days in advance. This would give news media companies “an unfair advantage over everyone else who has a website, YouTube channel, or small business”.
Like Facebook, Google also underlines the unprecedented reach media companies have through their platform.
Sharp Decline in Advertising Revenues
Most media companies in Australia back the News Media Bargaining, including News Corp Australia, Nine Entertainment, and Guardian Australia. As elsewhere in the world, publishers have been hit hard by the coronavirus crisis. They are facing a decline in advertising revenues and many newspapers were forced to slow down content production because of this.
The Australian government is not the first government that wants to push Facebook and Google to pay for news. Nonetheless, there still is a lot of controversy about the proposed new law, the true value of content, and appropriate ways to set a fair price. Combined, Google and Facebook account for more than 30% of spending in online advertising in Australia. This leaves news media companies with a shrinking piece of the pie, despite the fact that the content that they produce is part of the appeal of digital platforms.
“One third of Australians get their news from Facebook. If Facebook pulls news they will lose all that data harvesting“, Belinda Barnet, a senior lecturer at Swinburne University of Technology, Melbourne, tweeted. “Our humble ACCC has hit a nerve. They’ve cornered two of the largest platforms on earth and demanded they share a small amount of revenue with premium content creators. My God, the tantrums.”