Facebook news ban: Australian ministers agree to water down new laws

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, painting 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 to the site altogether.

Ministers have also reassured Facebook that it will get to choose which news sites do and don’t appear on its platform – allowing the site to block companies that push for higher prices which will significantly weakening their bargaining position.

The concessions will have global ramifications as the UK, EU and US all consider whether to pass similar rules, but 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. 

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.

If the law is going to be applied, then Facebook will be given one month’s notice – allowing the company more time to strike deals and wiggle out of regulation.  

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’.

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 on Tuesday. 

The new rules also state that Facebook is free to offer different fees to different news organisations as a result of its negotiations, and will not have to reveal the inner workings of their closely-guarded algorithms or disclose data.

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.  

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.’  

Australia’s new law was designed to tackle the huge power imbalance between big tech companies which dominate their markets and soak up the lion’s share of advertising revenue by forcing them to pay for the news content they host and reveal some of their closely-guarded algorithms and data. 

Google and Facebook had led opposition to the changes, fearing it would create international precedent that would threaten their business models.

Initially, Google threatened to pull its search engine from Australia altogether – but backed down last week and began doing deals with media outlets.

Facebook went further, blocking all news content in a hastily-organised ban that also brought down charity pages, emergency services providing Covid information, domestic violence shelters and missing persons groups.

The ban even brought down the site’s own page for a short time.

Facebook has now agreed to restore news and negotiate deals similar to the ones Google has struck, but will do so with increased bargaining power after the changes were agreed. 

Google has been told about the changes and has described them as ‘sensible.’  

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, Google and Facebook have been largely unregulated and have grown into two of the world’s largest and most profitable companies.

But a string of scandals about misinformation, privacy violations, data harvesting and their virtual monopoly on online advertising has triggered the attention of watchdogs.

For every $100 spent by Australian advertisers today, $49 goes to Google and $24 to Facebook, according to the country’s competition watchdog. 

Critics of the law have said it is punishing successful companies and amounts to a money grab by struggling but politically connected traditional media.

They also lament that there is no requirement in the law that money gained by the media companies from Facebook and Google be spent on expanding public interest journalism rather than just boost profits.

Thousands of journalism jobs and scores of news outlets have been lost in Australia alone over the past decade as the sector watched advertising revenue flow to the digital players.

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.

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.

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.  

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.