By Mike Cherney
SYDNEY--In the clash between Facebook Inc. and Australia over
paying for news, one question remains hard to answer: who won?
Facebook's hard-edged move to block news on its platform in
Australia extracted concessions from the government, which agreed
to ease a new law that effectively requires payment in exchange for
the social-media company restoring the content to its platform. Yet
the dramatic action drew rebukes from users, lawmakers and others
around the world who were troubled by Facebook's willingness to
abruptly remove vast amounts of information.
That action could deepen Facebook's challenges over time and
inspire other countries to pass tough rules, say some people who
follow internet regulation. In the U.S. and the U.K., lawmakers
criticized the news ban. In the European Union, one official urged
member countries to pass copyright laws that would strengthen news
publishers' right to compensation. In Canada, one minister said his
government would move forward with its own legislation.
"The fact that Facebook took the position they did, some
governments view that as a wake-up call and they are likely to be
more aggressive in their dealings with Facebook," said Michael
Geist, a law professor at the University of Ottawa in Canada who
specializes in internet law. "We're already starting to see almost
a 'coalition of the willing' develop."
The decision to remove news from its platform in Australia was
the climax of the social-media giant's aggressive campaign against
the new rules. Facebook said the original law would have required
it to pay open-ended subsidies to media outlets. The company warned
several months earlier that it could remove news if the Australian
law moved forward, but many observers viewed the threat as a
bluff.
Australian officials were caught off guard. Australian Treasurer
Josh Frydenberg, a key official involved in the effort to pass the
law, talked on the morning of Feb. 18 to Facebook Chief Executive
Mark Zuckerberg, putting a game of tennis on hold.
"I became aware of it about 10 minutes before doing media
interviews," said Paul Fletcher, Australia's communications
minister, who arrived at the parliament building that morning to
talk to reporters. "I saw the treasurer about 20 minutes later. We
were in his office. He was in his tennis clothes all ready to go
out and play."
The news ban caused an uproar in Australia and affected content
from news outlets along with information from local health
agencies, the country's weather service and domestic-violence
support groups, among others. Health experts worried the public
wouldn't be able to find reliable information just as Australia
began coronavirus vaccinations. Facebook later said blocking that
content was inadvertent, but that it targeted an array of material
because the law's definition of news was vague.
"They really tore up the little shred of social license they had
left with the public by taking such an extreme action," said Chris
Cooper, executive director at Reset Australia, an advocacy
organization focused on the impact of social media on
democracy.
In a statement, a Facebook spokesperson said a solution allowing
the company to negotiate payment to publishers under fair
conditions was always the aim and noted the company's commitment to
supporting journalism in Australia and elsewhere.
"The original legislation failed to recognize the reality of the
relationship between publishers and Facebook," the spokesperson
said, noting that the company has signed deals with media outlets
since the compromise was reached. "We're pleased to have an
agreement with the government and resume negotiations with
publishers where they left off."
Facebook declined to comment on the broader potential impact of
its actions in Australia. News Corp, owner of Wall Street Journal
publisher Dow Jones & Co., has a commercial agreement to supply
news through Facebook.
Australian officials said they got what they wanted out of the
compromise, since the law could still require Facebook to submit to
binding arbitration if it can't reach deals with publishers.
"We have not changed the fundamental direction of the code," Mr.
Fletcher told the Journal.
Facebook had argued the Australian law was unfair because news
makes up only 4% of the content people see in their feeds, and that
the platform sends significant traffic to news websites. Facebook
decided to remove news once the law passed the lower chamber of
Australia's parliament.
"It wasn't a decision taken lightly. But when it came, we had to
take action quickly because it was legally necessary to do so
before the new law came into force," Nick Clegg, Facebook's vice
president of global affairs and a former British deputy prime
minister, wrote in a recent blog post.
Some business groups and computer scientists also raised
concerns that the law could impinge the free sharing of links
online. Mr. Geist, the law professor, said Facebook shouldn't have
to pay to display links to news stories.
"They don't post it themselves, their users do," he said,
referring to news content. "Many times, the publishers themselves
are doing the posting," he said.
Alphabet Inc.'s Google, also subject to the Australian law, at
one point threatened to shut down its search engine there. The
search giant later decided to license content from publishers,
including News Corp, which agreed to a three-year deal worth tens
of millions of dollars.
The changes won by Facebook include requiring mediation before
moving onto final arbitration. Another change requires the
treasurer to consider whether a platform has already agreed to
commercial deals with publishers before deciding whether the law's
provisions should apply. The government also agreed to require the
treasurer to give 30 days' notice before making a decision.
Mr. Cooper, of Reset Australia, said those changes make it less
likely that the law will be used, but he welcomes incentives for
tech companies to negotiate with news outlets.
Facebook didn't take long to return to the bargaining table.
Australia's Seven West Media Ltd. announced a deal with the company
on the same day the compromise was reached with the government.
Just hours earlier, Mr. Frydenberg, the treasurer, told
reporters: "Facebook has re-friended Australia."
Philip Wen contributed to this article.
Write to Mike Cherney at mike.cherney@wsj.com
(END) Dow Jones Newswires
March 02, 2021 05:44 ET (10:44 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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