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 advised the government it will restore Australian news pages ‘within the coming days’. Pictured: CEO Mark Zuckerberg with wife Priscilla Chan
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 months’ 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.
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 on Tuesday with Communications Minister Paul Fletcher) smiled as he announced Facebook will restore news pages in Australia
Google responded to the new law by striking multi-million deals but Facebook banned Australians from viewing news on its website in a ‘disgraceful’ protest at the new rules. Pictured: Posts were blocked on the Daily Mail Australia Facebook page
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.
Prime Minister Scott Morrison (right) sits next to Treasurer Josh Frydenberg (left) and Communications Minister Paul Fletcher (behind) as they speak to Google boss Sundar Pichai
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.