Facebook news ban: Australian ministers agree to water down new laws
Facebook’s victory over Australia: New laws that would force tech giants to pay for news are watered down, allowing Zuckerberg to avoid arbitration that would set prices
- Australia is set to pass world-first law to require tech giants to pay for news
- Facebook banned news content in Australia last week over regulation battle
- But CEO Mark Zuckerberg has agreed to undo the ban after government talks
- Treasurer Josh Frydenberg made some changes to law due to pass this week
Facebook will end its news blockade of Australia ‘in the coming days’ after ministers folded and agreed to water down new laws requiring the site to pay for content
Australian Treasurer Josh Frydenberg announced the news today after days of one-to-one negotiations with Facebook CEO Mark Zuckerberg, hailing it as a victory and saying the social media giant has agreed to do deals with publishers.
But, in return, Mr Frydenberg announced significant changes to legislation due to be passed this week which will make it much easier for Facebook to strike deals on its terms – and may mean the new laws cease to apply altogether.
The move will have global ramifications since the UK, EU and US are all considering bringing in similar rules, and will now find it much harder to go beyond the precedent set in Australia.
Mr Frydenberg admitted as much on Tuesday, when he said his country had become a ‘proxy battle’ for global regulation of big tech firms.
Facebook has agreed to restore news pages in Australia ‘in the coming days’ after CEO Mark Zuckerberg (right) forced MPs to water down new laws that will make the site pay for content
Among key changes agreed by the government is one which states the law will not apply to Facebook if the company can show a ‘significant contribution’ to Australian journalism by striking its own deals with news publishers.
Facebook will also be given one month’s notice if the law is going to be applied, giving the company more time to strike deals and wiggle out of the regulations.
Even after the law is applied, Facebook will have a further two months to negotiate deals on its terms and will only be forced into arbitration – which would set a fixed price for news content – ‘as a last resort’.
The new rules also state that Facebook is free to offer different fees to different news organisations as a result of its negotiations.
In effect, it means arbitration is unlikely to ever be used and encourages deals to be struck ahead of time – with Mr Frydenberg telling media companies to ‘get out there and talk to Facebook’ as he announced the changes.
The government has also given Facebook assurances that it would be free to pull news content off its site again in future, if the laws were ever applied.
Australian MPs have already voted to pass the legislation and senators are expected to add their approval Wednesday, after which the bill will become law.
‘We will negotiate’: Facebook’s statement on the deal
‘We’re pleased that we’ve been able to reach an agreement with the Australian government and appreciate the constructive discussions we’ve had with Treasurer Frydenberg and Minister Fletcher over the past week.
‘We have consistently supported a framework that would encourage innovation and collaboration between online platforms and publishers.
‘After further discussions, we are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them.
‘As a result of these changes, we can now work to further our investment in public interest journalism and restore news on Facebook for Australians in the coming days.’
By William Easton, Managing Director, Facebook Australia & New Zealand
Facebook’s Australian managing director, Will Easton, welcomed the changes on Tuesday, saying: ‘We’re pleased that we’ve been able to reach an agreement with the Australian government and appreciate the constructive discussions we’ve had.’
Mr Frydenberg added: ‘Australian news will be restored to the Facebook platform, and Facebook has committed to entering into good faith negotiations with Australian news media businesses and seeking to reach agreements to pay for content.’
As soon as the announcement was made, Facebook bosses sent emails to media executives saying the company will restart negotiations over payment for news content after talks stalled.
Mr Frydenberg said Facebook’s ban on Australian news – which sparked calls for a global boycott – was ‘regrettable’ and revealed that he berated Mr Zuckerberg during a zoom call.
‘I expressed that very directly to Mark himself. I said, not only was the Australian government disappointed in what Facebook did, but we were disappointed in the way they did it, because we weren’t given any advance notice,’ he said.
Australia’s new law aims to tackle the huge power imbalance between big tech and media companies by forcing selected digital platforms to pay for the news content they host and reveal some of their closely-guarded algorithms and data.
The tech firms had fiercely opposed the legislation from the get-go, fearing it would create international precedent that would threaten their business models.
Amendments announced on Tuesday include a requirement for the government to give a digital platform a month’s notice before applying the code to that company.
Another clause states the Treasurer must also take into account deals already done when deciding which platforms to designate under the code.
This paves the way for Google to potentially dodge the legislation after it hastily signed multi-million-dollar agreements with Australia’s biggest media companies Seven, Nine and Rupert Murdoch’s News Corp last week.
Another amendment will make clear that final-offer arbitration will only be required after two months of good-faith mediation between a platform and a news business.
This method of arbitration, which selects one side’s position as the resolution, was one of Facebook and Google’s key grievances because they said it incentivised news companies to make outlandish claims.
‘These amendments will provide further clarity to digital platforms and news media businesses about the way the code is intended to operate and strengthen the framework for ensuring news media businesses are fairly remunerated,’ Mr Frydenberg said.
‘The government has been advised by Facebook that it intends to restore Australian news pages in the coming days.’
Google has been told about the changes and has described them as ‘sensible,’ the Treasurer said.
The bargaining code is expected to pass the Senate and become law this week with support from Labor and the Greens, who will seek some minor amendments.
Treasurer Josh Frydenberg (right) hailed the news as a victory and said Facebook will negotiate with Australian publishers over their content
Facebook last week blocked all news content in Australia in protest at the new laws, sparking international outcry and calls for tougher regulations
Facebook’s news ban last week sent shockwaves around the world and sparked campaigns to delete the app.
‘Delete Facebook’, ‘Boycott Zuckerberg’ and ‘Facebook We Need To Talk’ began trending on rival site Twitter.
David Cicilline, a Democrat politician from Rhode Island in the US, even went so far as to say ‘Facebook is not compatible with democracy’ as users were also urged to give up Instagram and WhatsApp because Facebook owns them.
British MP Julian Knight said Facebook appeared to be using Australia as a ‘test case’ for how democracies would react to having news banned, and called for legislators around the world to bring the tech giant ‘to heel’.
Among those urging users to delete the app was Stephen Scheeler, former Facebook Australia CEO, who slammed the ‘alarming’ move and accused Mark Zuckerberg of being motivated by ‘money, power, and not [by the] good.’
Critics also said Facebook’s ban would lead to the proliferation of conspiracy theories and misinformation – which the platform claims to be tackling.
What changes have been made to the news media bargaining code?
• The government has agreed to take into account commercial deals already struck between tech firms and news publishers before deciding whether to apply the new code to them
• Ministers will notify tech firms one month before they decide to apply the code, allowing the firms time to negotiate and strike deals
• The code will not automatically apply in cases where tech giants have agreed to pay news firms differing amounts based on those negotiations; and
• When the code is applied, tech firms will have another two months to try and reach a deal with media companies before both sides are forced to enter the arbitration process as a ‘last resort’
The ban appeared rushed and spectacularly botched – as it brought health services providing Covid information, charities, food banks, and even Facebook’s own homepage.
Instead of seeing posts from the social media giant, users clicking on its own Facebook page were instead met with a message saying ‘no posts yet’.
In a spectacular case of buck-passing, Facebook then attempted to blame the errors on the Australian government, saying it mirrors the ‘broad and vague’ definition of ‘news’ in its new law.
Facebook and Google still face the prospect of having to agree deals with media around the world, as the European Union, Canada and other jurisdictions move to regulate the sector.
Since their emergence around the turn of the century, the tech platforms have been largely unregulated and have grown into two of the world’s largest and most profitable companies.
Australian ministers (Prime Minister Scott Morrison, right, Treasurer Josh Frydenberg, left, and Communication Minister Paul Fletcher, rear) have agreed to make four concessions to the law which will make it more beneficial to Facebook
But a string of scandals about misinformation, privacy violations, data harvesting and their virtual monopoly on online advertising has triggered the attention of watchdogs.
Mr Frydenberg and Communications Minister Paul Fletcher drew up Australia’s law after a three-year inquiry by Australia’s competition regulator, the ACCC, which found Google and Facebook have ‘an imbalance in bargaining power’ when dealing with news companies.
For every $100 spent on digital advertising, $53 goes to Google, $28 to Facebook and only $19 goes to others.
The code was intended to apply to Facebook NewsFeed and Google Search – but other services such as Instagram and YouTube can be added if a bargaining power imbalance arises.
In addition to payment for content, the measures would also force transparency around the closely guarded algorithms that tech firms use to rank content.
The code will require Google and Facebook to give publishers 14 days notice of any algorithm changes that are likely to have a significant impact on their traffic.
Under a two-way value model, the payment for content would take into account the value that Google and Facebook provide to news organisations by driving traffic to their sites.
What is the bargaining code and why is it needed?
WHY IS IT NEEDED?
Google and Facebook derive a benefit from the ability to make Australian news content available to their users.
Australian news businesses have had to accept commercial deals with the platforms that are less favourable than they would otherwise agree to.
Intervention is needed to address this imbalance because of the public benefit of news and the importance of a strong independent media in a well-functioning democracy.
For every $100 spend on advertising, $53 goes to Google, $28 goes to Facebook and $19 goes to other media.
WHAT IS THE CODE?
The government wants good faith commercial deals to be struck outside the code.
But if the platforms and news organisations are unable or unwilling to reach an agreement ‘final offer arbitration’ will take place.
The arbiters will take into account the benefits traditional news media businesses get by having eyeballs on their product.
The digital platforms will also need to adhere to a series of minimum standards.
WHO IS INCLUDED?
* Facebook and Google.
* ABC, SBS and Australian commercial news media organisations.
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