Australia is drafting a new regulation which requires tech platforms to pay publishers for content. In response, Facebook will “reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram”.
“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,” Facebook wrote in a blog post.
Australia’s News Media Bargaining Code law was proposed after an inquiry in 2019 found that tech giants like Facebook and Google took too much of the share from online advertising revenue. For every USD100 spent in online advertising, USD47 went to Google, USD24 to Facebook and USD29 to the rest.
Under the proposed legislation, Google and Facebook would have to provide publishers with advance notice of changes to their algorithms, with penalties for failing to comply. However, Facebook says that it would give news organisations in Australia an unfair competitive advantage.
“The ACCC (Australian Competition and Consumer Commission) 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,” wrote Facebook.
They also continued saying that over the first five months of 2020 Facebook sent 2.3 billion clicks from Facebook’s News Feed back to Australian news websites at no charge. It also resulted to “additional traffic worth an estimated $200 million AUD to Australian publishers”.
However, media companies in Australia have largely supported the proposed changes. Large Australian media companies have asked staff to take pay cuts in recent months, and several newspapers were forced to halt production due to the economic downturn caused by the COVID-19 pandemic.
Previously, Google had also written an open letter regarding the proposed Australian law—saying that “the way Aussies search every day on Google is at risk”. The ACCC responded by saying Google’s letter contains “misinformation” and that “a healthy news media sector is essential to a well-functioning democracy.”