Facebook tells Aussie government what it can do with its new media code

Australia wants to force tech companies to hand over more cash to its legacy media but Facebook would rather just walk away.

A proposed law would compel the likes of Facebook and Google to hand some cash over to news media whenever any of their content is shared via their platforms. Unsurprisingly Google has already pushed back, but Facebook has significantly escalated the matter by threatening to just ban such sharing, rather than be subject to state extortion.

“Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram,” wrote Will Easton, MD of Facebook Australia & New Zealand in a blog post. “This is not our first choice – it is our last. But 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.

“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. Still, we recognize that news provides a vitally important role in society and democracy, which is why we offer free tools and training to help media companies reach an audience many times larger than they have previously.

“News organisations in Australia and elsewhere choose to post news on Facebook for this precise reason, and they encourage readers to share news across social platforms to increase readership of their stories. This in turn allows them to sell more subscriptions and advertising. Over the first five months of 2020 we 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.”

ACCC Chair Rod Sims published the following response. “Facebook’s threat today to prevent any sharing of news on its services in Australia is ill-timed and misconceived. The draft media bargaining code aims to ensure Australian news businesses, including independent, community and regional media, can get a seat at the table for fair negotiations with Facebook and Google.

“Facebook already pays some media for news content. The code simply aims to bring fairness and transparency to Facebook and Google’s relationships with Australian news media businesses. We note that according to the University of Canberra’s 2020 Digital News Report, 39% of Australians use Facebook for general news, and 49% use Facebook for news about COVID-19. As the ACCC and the Government work to finalise the draft legislation, we hope all parties will engage in constructive discussions.”

Sims’ weak response reveals that his bluff has been called and he doesn’t have a backup plan. If he really thought social media was such a drain on the finances of legacy media then, surely, he should celebrate the Facebook decision. Whenever the public sector demands money from the private sector, the latter can always avoid paying by moving to another jurisdiction. The ACCC is now in a tight spot in which it can only escalate further or capitulate – both of which will reflect badly on it and probably damage the media it claims to be championing.