Facebook is threatening to ban news from being shared on its platforms in Australia, due to a new regulatory code that would force themselves and Google to pay news publishers for content.
The mandatory news code being introduced has been supported by major media companies including Nine Entertainment, News Corp Australia and Guardian Australia, looking to offset the loss of advertising revenue created by articles being posted for free to Google and Facebook.
Hugh Marks, the CEO of Nine, has said to the The Sydney Morning Herald and The Age: “There are some technical things we want to work through to make sure that the application of the code to businesses like ours is clear and there is some work that needs to be done but we are supportive of where that is going and we see it as a significant potential outcome for the business.”
However, Facebook Australia’s Managing Director Will Easton disagrees, saying if the new media code becomes law, it will be “counterproductive” to the support of struggling news organisations.
“Australia is drafting a new regulation that misunderstands the dynamics of the internet and will do damage to the very news organisations the government is trying to protect,” said Mr Easton, in a public statement from Facebook.
“When crafting this new legislation, the commission overseeing the process ignored important facts, most critically the relationship between the news media and social media and which one benefits most from the other.”
Under the news media bargaining code released by the Australian Competition and Consumer Commission (ACCC), Facebook and Google will have three months to reach revenue sharing agreements with media companies, before an independent arbitrator will impose a mandatory arrangement.
The proposed code also states that the media behemoths must provide advanced notice to media companies if there are to be algorithm changes, as well as information on how and when they make data available for publishers. Failure to comply with these changes could result in a 10 per cent revenue penalty for Facebook and Google.
Facebook claims that they have been trying to negotiate an agreement with the ACCC to stop the new media code from being legislated.
“We already invest millions of dollars in Australian news businesses,” says Mr Easton. “During discussions over this legislation, we offered to invest millions more.”
“The ACCC presumes that Facebook benefits most in its relationship with publishers, when in fact the reverse is true. News represents a fraction of what people see in their News Feed and is not a significant source of revenue for us.”
Facebook has already updated its terms of service, to be enforced from 1 October.
Under section 3.2 of its new terms of service, Facebook will be able to “remove or restrict access to content, services or information if we determine that doing so is reasonably necessary to avoid or mitigate adverse legal or regulatory impacts to Facebook”.
Facebook have said that their move to ban news publishing on both their main app and Instagram is “not our first choice”.
“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.”