Facebook Says It Will Bar News Sharing in Australia if Proposed Payment Rules Become Law
September 01 2020 - 12:00AM
Dow Jones News
By Mike Cherney
SYDNEY--Facebook Inc. has threatened to stop allowing
Australians to share news on its site and on Instagram if lawmakers
allow media companies to demand payment from digital platforms.
Australia in July unveiled a plan that would require Facebook
and Alphabet Inc.'s Google to negotiate with media companies over
payment. If the sides couldn't agree, an independent arbitrator
would select one of their proposals. If enacted by Australia's
Parliament, the rules could be a model for other countries that
have long sought to compel tech giants to compensate local
publishers.
In a statement dated Monday, Facebook outlined the impact it
said the rules would have on users of its site and its Instagram
photo-sharing platform. The sharing ban would apply to both local
and international news stories, it said.
It also warned that removing news sharing could hurt publishers.
In the first five months of 2020, Facebook said, it sent 2.3
billion clicks to Australian news websites at no charge--traffic it
valued at roughly $148 million.
"We are left with a choice of 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," Will Easton,
managing director for Facebook Australia & New Zealand, wrote
in the statement. "Unfortunately, no business can operate that
way."
In a letter of its own about two weeks ago, Google said the new
rules would force it to give information to media outlets that
could help them to artificially inflate their search-engine
rankings--meaning it couldn't guarantee Google users would get the
most relevant results.
"The law is set up to give big media companies special treatment
and to encourage them to make enormous and unreasonable demands
that would put our free services at risk," Mel Silva, managing
director for Google Australia & New Zealand, wrote in the
letter.
The Australian Competition and Consumer Commission, the
regulator that developed the proposed rules, didn't have an
immediate comment on Facebook's announcement. It earlier said
Google's letter contained misinformation about what the proposed
rules would require social-media platforms to do, though Google in
turn disagreed with the regulator's characterization.
Media companies in Australia, including News Corp, owner of The
Wall Street Journal publisher Dow Jones & Co., have supported
the proposed regulations, saying they will prevent social-media
giants from walking away from negotiations over payment. Platforms
like Google and Facebook collect advertising revenue based on
visits to their sites, and links to news articles that are shared
by users could help to increase traffic.
News Corp is a dominant player in Australian media, with many
newspapers including the Australian, the Daily Telegraph in Sydney
and the Herald Sun in Melbourne.
Although Google and Facebook have resisted paying publishers for
content, they have softened their stance recently and struck deals
with certain publishers. Last October, News Corp reached a deal to
let Facebook feature headlines from The Wall Street Journal and
other Dow Jones media properties.
Facebook on Monday said 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. Still, it said it
has offered to invest millions of dollars in Australian news
businesses and wants to support struggling news organizations.
The Australian government, led by conservative Prime Minister
Scott Morrison, last year asked the competition regulator to
develop a voluntary code that would govern the relationship between
news businesses and digital platforms. After talks stalled, the
government asked the regulator to develop a mandatory code.
A public-comment period on the proposed rules ended on Aug. 28,
and final legislation could be introduced in Parliament soon.
Write to Mike Cherney at mike.cherney@wsj.com
(END) Dow Jones Newswires
August 31, 2020 23:45 ET (03:45 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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