META Meta Platforms Inc

By Jeff Horwitz 

Facebook Inc. said it would restrict publishers and users in Australia from viewing or sharing news articles, ramping up a standoff with the government there over a proposal that would force tech companies to pay newspapers for content.

The Australian proposal, which is proceeding through the legislature, could prompt other countries to follow suit in a global transformation of the relationship between tech companies and traditional media.

Facebook's move will result in a blackout for content from Australian publishers on Facebook world-wide as well as the unavailability of stories from both domestic and international news content within Australia. Facebook said that news accounts for "less than 4% of the content people see in their News Feed" but didn't provide detail on how it had calculated that number.

Facebook, which has been threatening for months that the proposal could force its hand, said the Australian government continues to misunderstand the relationship between publishers and the company's social-media platforms.

"It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter," the company said in a statement Wednesday from William Easton, Facebook's managing director, for Australia and New Zealand.

Facebook will seek to block or remove links to news posted to its platform and establish a system to review news content that slips through its filters. The company said that it believed that restricting news on Australian Facebook would cost publishers more than $300 million U.S. dollars.

Facebook and Alphabet Inc.'s Google have been in lengthy negotiations with the Australian government. The Australian proposal would effectively require publishers and tech companies to negotiate, and submit to binding arbitration if they can't reach a deal.

Earlier on Wednesday, News Corp announced that it has agreed to a multiyear partnership with Google to provide journalism from its news sites around the world in return for significant payments from the search giant.

News Corp owns Wall Street Journal parent Dow Jones & Co.

Google had previously joined Facebook in saying the proposal set an unmanageable precedent, and said it would possibly shut down its search engine in Australia as a result.

Facebook has been willing to pay for news content in other contexts. In 2019, Facebook announced it would pay news organizations including the Journal -- in some cases millions of dollars a year -- to license their headlines and story summaries for a news service.

Australia's effort follows years of countries trying to force tech companies to pay publishers, with limited success. The proposal got a surprise boost this week when Microsoft Corp. said i it would support the plan, and suggested the U.S. should copy it.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press," Microsoft President Brad Smith wrote in a blog post published Thursday. "It should copy it instead."

In its statement, Facebook drew a contrast to the way it handles content as compared with Google. The search giant takes content from newspapers and other publishers whereas they "willingly choose to post news on Facebook," Mr. Easton said. Posting on Facebook allows those publishers to sell more subscriptions, grow their audiences and increase advertising revenue, he said.

Write to Jeff Horwitz at Jeff.Horwitz@wsj.com

(END) Dow Jones Newswires

February 17, 2021 15:51 ET (20:51 GMT)

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