CANBERRA (Reuters) – Facebook said on Tuesday it will restore Australian news pages after negotiating changes with the government to a proposed law that forces tech giants to pay for media content displayed on their platforms.
Australia and the social media group have been locked in a standoff for more than a week after the government introduced legislation that challenged Facebook and Alphabet Inc’s Google’s dominance in the news content market.
Facebook last week blocked Australian users from sharing and viewing news content on its popular social media platform, drawing criticism from publishers and the government.
But after a series of talks between Treasurer Josh Frydenberg and Facebook CEO Mark Zuckerberg, a concession deal has been struck, with Australian news expected to return to the social media site in coming days.
The issue has been widely watched internationally as other countries including Canada and Britain consider similar legislation.
“Facebook has ‘refriended’ Australia, and Australian news will be restored to the Facebook platform,” Frydenberg told reporters in Canberra on Tuesday.
Frydenberg said Australia had been a “proxy battle for the world” as other jurisdictions engage with tech companies over a range of issues around news and content.
While Big Tech and media outlets have battled over the right to news content in other jurisdictions, Australia’s proposed laws are the most expansive and seen as a possible template for other nations.
“Facebook and Google have not hidden the fact that they know that the eyes of the world are on Australia, and that’s why they have sought I think to get a code here that is workable,” Frydenberg said.
Australia will offer four amendments, which include a change to the proposed mandatory arbitration mechanism used when the tech giants cannot reach a deal with publishers over fair payment for displaying news content.
‘UNTESTED’
Facebook said it was satisfied with the revisions, which will need to be implemented in legislation currently before the parliament.
“Going forward, the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation,” Facebook Vice President of Global News Partnerships Campbell Brown said in a statement online.
She said the company would continue to invest in news globally but also “resist efforts by media conglomerates to advance regulatory frameworks that do not take account of the true value exchange between publishers and platforms like Facebook.”
The government had up until Monday maintained it would not change the legislation.
Analysts said while the concessions marked some progress for tech platforms, the government and the media, there remained many uncertainties about how the law would work.
The amendments include an additional two-month mediation period before the government-appointed arbitrator intervenes, giving the parties more time to reach a private deal.
It also inserts a rule that an internet company’s existing media deals be taken into account before the rules take effect, a measure that Frydenberg said would encourage internet companies to strike deals with smaller outlets.
The so-called Media Bargaining Code has been designed by the government and competition regulator to address a power imbalance between the social media giants and publishers when negotiating payment for news content used on the tech firms’ sites.
Media companies have argued that they should be compensated for the links that drive audiences, and advertising dollars, to the internet companies’ platforms.
A spokesman for Australian publisher and broadcaster Nine Entertainment Co Ltd welcomed the government’s compromise, which it said moved “Facebook back into the negotiations with Australian media organisations.”
Major television broadcaster and newspaper publisher Seven West Media Ltd said it had signed a letter of intent to strike a content supply deal with Facebook within 60 days.
A representative of News Corp, which has a major presence in Australia’s news industry and last week announced a global licencing deal with Google, was not immediately available for comment.
The proposed code will apply to Facebook and Google, although the competition regulator, which advised government on the legislation, has said it’s likely other tech firms will be added.
Tama Leaver, professor of internet studies at Australia’s Curtin University, said Facebook’s negotiating tactics had dented its reputation, although it was too early to say how the proposed law would work.
“The law itself remains untested. It’s like a gun that sits in the Treasurer’s desk that hasn’t been used or tested,” said Leaver.
Frydenberg said Google had welcomed the changes. A Google spokesman declined to comment on Reuters’ queries.
Google also previously threatened to withdraw its search engine from Australia but later struck a series of deals with publishers.
Australian Competition and Consumer Commission chair Rod Sims, the main architect of the law, declined to comment.
The government will introduce the amendments to Australia’s parliament on Tuesday, Frydenberg said. The country’s two houses of parliament will need to approve the amended proposal before it becomes law.
(Reporting by Colin Packham and Byron Kaye; additional reporting by Renju Jose; Writing by Jonathan Barrett; Editing by Sam Holmes)
Following are comments from Facebook, Australia and analysts, with newest comments first:
THOMAS VINJE, PARTNER AT LAW FIRM CLIFFORD CHANCE
“The Australian approach is spreading across the globe, and this means that many governments are going to impose obligations on Google and Facebook to compensate publishers fairly for the use of their content.
“Google and Facebook invest nothing in content but simply commandeer the investment made by others, including publishers, in content and other intellectual property.
“This will change, with Australia having taken the lead and pushing for a global adoption of its approach, for example through the G7. Australia’s success in staring down Google and Facebook will herald a tougher regime in many other countries.
“Big publishers have the ability to flex some muscle, but their efforts to be compensated appropriately for their content should redound to the benefit of all content providers.”
RASMUS NIELSEN, DIRECTOR, REUTERS INSTITUTE FOR THE STUDY OF JOURNALISM, PROFESSOR OF POLITICAL COMMUNICATION, OXFORD UNIVERSITY
“Retaining unilateral control over which publishers they do cash deals with as well as control over if and how news appears on Facebook surely looks more attractive to Menlo Park than the alternative.
“It is virtually certain that any deals Facebook strikes will benefit the bottom line of News Corp and a few other big Australian publishers. Whether such deals will also be forthcoming for smaller publishers remains to be seen.”
RICHARD WINDSOR, INDEPENDENT BRITISH TECHNOLOGY ANALYST
“Facebook has scored a big win in arriving at an agreement with the Australian government regarding paying for news from Australian sources with concessions that virtually guarantee that it will be business as usual from here on.
“Prior to this “sudden” breakthrough, Facebook had cut off access for all Australian news outlets to its platform which provoked a large public outcry. Critically, the Australian news sites also took a big hit in internet traffic, clearly demonstrating that Australian media needs Facebook more than Facebook needs it.
“Facebook has been accused of acting like North Korea in its actions, but I think that they are fully justified as Australia (and everyone else) seems to be viewing Facebook as a free public service rather than a business.
“As the news sites have quickly realised, their advertising revenues are likely to be lower without Facebook than with it even if Facebook pays them no money at all for their content.
“This clearly demonstrates that the current arrangement is better than no arrangement at all. This notion of free internet is the classic misconception that is held both by the general public and lawmakers and the sooner that this is dispelled, the sooner the correct working relationship can be established.”
Earlier comment:
JOSH FRYDENBERG, AUSTRALIA’S TREASURER
“There is no doubt that Australia has been a proxy battle for the world. I have no doubt that so many other countries are looking at what is happening here in Australia.
“Facebook and Google have not hidden the fact that they know that the eyes of the world are on Australia, and that’s why they have sought to get a code here that is workable.”
CAMPBELL BROWN, FACEBOOK VICE PRESIDENT OF GLOBAL NEWS PARTNERSHIP
“We have come to an agreement that will allow us to support the publishers we choose to, including small and local publishers.
“The government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation.
“It’s always been our intention to support journalism in Australia and around the world, and we’ll continue to invest in news globally and resist efforts by media conglomerates to advance regulatory frameworks that do not take account of the true value exchange between publishers and platforms like Facebook.”
TAMA LEAVER, PROFESSOR OF INTERNET STUDIES AT CURTIN UNIVERSITY, AUSTRALIA
“It’s not a draw.
“Even though Facebook managed to cover some concessions and the law is perhaps softer, I still think they were the big losers here simply because of the way that they tried to negotiate over the last week. A lot of Australians are a lot more hesitant to rely on Facebook and in terms of their reputation and their Australian user base they have lost trust.
“The law itself remains untested. It’s like a gun that sits in the treasurer’s desk that hasn’t been used or tested.”
PAUL BUDDE, AUSTRALIA-BASED INDEPENDENT INTERNET ANALYST
“Facebook won, as the necessary changes were made to the legislation that avoids them making changes to their business model.”
The Australian government was still able to say it “stood up to the giants and that got international attention (but) the digital giants remain as strong as ever.”
(Reporting by Colin Packham, Byron Kaye, Douglas Busvine, Kate Holton, Supantha Mukherjee and Renju Jose. Editing by Louise Heavens and Mark Potter)
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