By Jonathan Barrett and Byron Kaye
SYDNEY, Feb 18 (Reuters) – Facebook Inc has blockedAustralian users from sharing and viewing news content on itspopular social media platform, escalating a dispute with thegovernment over paying media publishers for content.
While Big Tech and media outlets have battled over the rightto news content in other jurisdictions, Australia’s looming lawrepresents the most expansive reform and is being closelywatched around the world.
WHAT WILL THE LEGISLATION DO?
The so-called Media Bargaining Code has been designed by thegovernment and competition regulator to address a powerimbalance between the social media giants and publishers whennegotiating payment for news content used on the tech firms’sites.
Under the code, news outlets will be required to negotiatecommercial deals individually or collectively with Facebook andGoogle. If they cannot reach an agreement, an arbitrator willdecide whose offer is more reasonable. If Facebook or Googlebreak any resulting agreements, they can be fined up to A$10million ($7.4 million) in civil penalties.
The law also requires tech firms give media outlets noticewhen they change search algorithms in a way affecting the orderin which content appears. They must also share their use ofconsumer data extracted from news content on their sites.
The proposed code will apply to Facebook and Google,although the regulator, which advised government on thelegislation, has said it’s likely other tech firms will beadded.
HOW IS AUSTRALIA’S APPROACH DIFFERENT?
Australia has used competition law to draft the MediaBargaining Code, an approach the regulator has argued is muchmore effective than the copyright legislation being used inother jurisdictions, including the EU.
The difference between the two has been highlighted by therecent deals struck with Google by Australian publishers and byoutlets in France, which is the first EU country to bring an EUdirective on copyright into national law.
Australia’s two largest free-to-air television broadcastershave struck deals collectively worth A$60 million ($47 million)a year, according to media reports. That dwarfs the $76 millionGoogle will split between 121 publishers in France over threeyears, which averages $209,000 a year per publisher, as reportedby Reuters.
WHY HAS THE DISPUTE ESCALATED?
The proposed legislation has reached a crunch point, withwidespread support in parliament, where it is expected to bevoted into law within days.
In recent years, traditional media companies operating inAustralia have suffered huge hits to income streams, due todwindling subscriptions and advertising. For every A$100 spenton online advertising in Australia, excluding classifieds,nearly one-third goes to Google and Facebook, the competitionregulator has said.
Facebook’s decision to block users from sharing and viewingnews content was condemned by Australia’s political leaders onThursday after many of the country’s official health anddisaster management alerts were also erased from news feeds.
Facebook said the law did not provide clear guidance on thedefinition of news content, although it said it would restorecontent that was inadvertently impacted.
WHAT HAS THE RESPONSE BEEN?
Facebook said that the law “fundamentally misunderstands”the relationship between itself and publishers and it faced astark choice of attempting to comply with it or ban newscontent. It said its platform generates billions of freereferrals to Australian publishers worth significant sums to themedia companies.
Alphabet Inc-owned Google, however, has backeddown from a threat to withdraw its main search engine fromAustralia if the laws go ahead, and has instead struck dealswith some of the country’s major commercial publishers. Theyinclude a global deal with News Corp for an unnamed sumin one of the most extensive deals of its kind with Big Tech.
Australia has previously engaged in lengthy battles withmajor corporations. In 2012, the then centre-left governmentbecame the first in the world to prohibit cigarette companiesfrom using designs on their packaging to attract consumers. BigTobacco companies mounted legal challenges but the courtsultimately upheld the law.(Reporting by Jonathan Barrett and Byron Kaye; editing by JaneWardell)