GOOGL Alphabet Inc

By Mike Cherney 

SYDNEY -- Lawmakers from the U.K. and Canada criticized Facebook Inc.'s ban on Australian users sharing news articles, and they said the tech giant could attract more scrutiny around the world as authorities grow increasingly concerned about its market power.

Facebook removed news from its platform in Australia in response to legislation that would effectively compel it to pay traditional media companies for content. The Australian legislation, supported by media companies including News Corp, owner of The Wall Street Journal publisher Dow Jones & Co., has been widely watched globally and could offer a model for other countries that want to require big tech companies to pay publishers for their content.

Facebook previously warned that it could remove news if the legislation progressed, but its announcement still caught many Australians by surprise. Users in Australia woke up Thursday morning to find that the Facebook pages of Australian and international publishers appeared blank. Those who tried to post news links got a message saying the post couldn't be shared. The tech giant also removed the pages of some government agencies, which it later said was inadvertent.

Facebook says the proposed law misunderstands the relationship between publishers and tech companies, and that it had little choice but to restrict news sharing rather than accept a law that ignores reality. The company says that publishers benefit because links on Facebook send users directly to news websites, and that publishers willingly choose to post news on Facebook, unlike with search engines, which take content from other websites.

In the U.K., Julian Knight, the lawmaker who chairs the digital, culture, media and sport committee, tweeted that Facebook's move to restrict news was deeply irresponsible. The news blackout also called into question Facebook's commitment to be a good global citizen, he said in the tweet.

"Australia is the canary in the coal mine now as far as social-media legislation is concerned," he said.

In Canada, the country's heritage minister, Steven Guilbeault, also called Facebook's actions irresponsible, and he said his government would move forward on legislation to fairly govern the relationship between news media and tech companies. Mr. Guilbeault said he met last week with his Australian, Finnish, German and French counterparts to work together on the issue.

"The more of us around the table adopting similar regulations, the harder it will be for Facebook to continue such actions," he said on his Facebook page. "There is strength in numbers."

In the U.S., Facebook is facing antitrust litigation and it has been criticized in the past for being slow to remove misinformation from its platform, particularly around the 2016 election. Rep. David Cicilline, the chairman of the antitrust subcommittee in the House, also criticized the news ban in Australia.

Facebook has said it recognizes news plays an important role in a democracy, and it has been willing to pay for news in other contexts. In 2019, it announced it would pay news organizations -- including the Journal -- to license their headlines and story summaries for a news service. In response to questions for this article, Facebook noted on Friday that it recently joined with news organizations in the U.K. and launched Facebook News there last month, a feature in its app that carries news from publishers.

"We have a commitment to investing in quality news, and that hasn't changed," said Nicola Mendelsohn, a Facebook vice president who covers Europe.

Media outlets in Australia contend that the tech companies currently have no incentive to negotiate because Facebook and Alphabet Inc.'s Google effectively have monopolies over social media and search, respectively. The proposed law in Australia would essentially require publishers and tech companies such as Facebook and Google to negotiate, and submit to binding arbitration if they can't reach a deal.

Google has also opposed the law and at one point threatened to shut down its search engine in Australia. But Google has since agreed to new deals to pay publishers for content, including News Corp, which owns several big publications in Australia.

Others have raised concerns about the law. The Australian Industry Group, which represents businesses across a variety of sectors, said the law gives media outlets special treatment, and it worried that Australian businesses could bear higher search and marketing costs than competitors in other jurisdictions as a result of the law. Tim Berners-Lee, a British internet pioneer, said the law risks breaching a fundamental principle of the web by requiring payment for linking content online.

Facebook's news blackout was criticized by Australian officials and public-health experts, who pointed out that it could make it more difficult for people to get information from reliable media outlets just as Australia began rolling out its coronavirus vaccine. Prime Minister Scott Morrison said he wouldn't be intimidated, and other officials said they remain committed to passing the law.

"They may be changing the world, but that doesn't mean they run it," Mr. Morrison said on his Facebook page, adding that an increasing number of countries are concerned about the behavior of big tech companies. Mr. Morrison said he discussed the issue with Indian Prime Minister Narendra Modi Thursday and that he has also talked about it in the past with leaders from the U.K., France and Canada.

Australia's Treasurer Josh Frydenberg said Friday that negotiations with Facebook were continuing. He said he talked to Facebook Chief Executive Mark Zuckerberg and that the two discussed their remaining issues and agreed to try to work through them. They planned to talk again over the weekend, Mr. Frydenberg said on Twitter.

Mr. Frydenberg said the proposed law is already leveling the playing field between tech giants and the news companies. He argued that Google's recent deals wouldn't have happened without the possibility of the law being enacted. The law has passed Australia's lower chamber of Parliament, and the upper chamber is expected to consider the matter next week.

"This was never meant to be easy," Mr. Frydenberg said in a television interview Friday. "Otherwise other countries would have moved a long time ago. We're trying to succeed here in Australia where others have failed."

Peter Lewis, the director of the Australia Institute's Centre for Responsible Technology, said that by inadvertently removing pages from government agencies, unions and community groups, Facebook demonstrated just how much control it has over what goes on its platform -- a big concern for governments world-wide.

"It does feel like there is sea change coming," he said. "Two decades of unregulated expansion of platform technology without constraint is having negative consequences."

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

February 19, 2021 10:05 ET (15:05 GMT)

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