The tactic of removing all Australian news content by social media giant Facebook, in response to a new law it didn’t like, seems to have been vindicated, at least in the short term.

Australia is trying to introduce a law forcing Facebook to pay news publishers for any of their content hosted on the site. Facebook objected to the law because it framed the relationship between it and the media as one that largely benefits the former, despite it being a rich source of traffic for the latter.

In the resulting negotiation the Aussie government overplayed its hand, leading Facebook to decide it needed to demonstrate it wasn’t bluffing when it said it would rather not host any news content at all, than accept the terms of the law. While cutting off news and, clumsily, some other sources of content such as health services, generated bad PR for Facebook, it seems to have fundamentally shifted the negotiation in its favour.

“The Morrison government will today introduce further amendments to the News Media and Digital Platforms Mandatory Bargaining Code,” said an announcement from Josh Frydenberg, the Aussie politician in charge of the negotiations. “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.”

Here are the fresh concessions:

  • a decision to designate a platform under the Code must take into account whether a digital platform has made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements with news media businesses;
  • a digital platform will be notified of the Government’s intention to designate prior to any final decision – noting that a final decision on whether or not to designate a digital platform would be made no sooner than one month from the date of notification;
  • non-differentiation provisions will not be triggered because commercial agreements resulted in different remuneration amounts or commercial outcomes that arose in the course of usual business practices; and
  • final offer arbitration is a last resort where commercial deals cannot be reached by requiring mediation, in good faith, to occur prior to arbitration for no longer than two months.

Essentially Facebook seems to have forced tweaks to the legislation that remove a lot of the previous constraints it would have faced in negotiating compensation deals with publishers. In other words, it’s prepared to pay out, just not under state-mandated terms. “The Government has been advised by Facebook that it intends to restore Australian news pages in the coming days.”

“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,” wrote Facebook’s Antipodean boss William Easton. “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.”

The apparent resolution of this situation has global implications. Clumsy and flawed though the Aussie government’s initiatives have proven, the eventual precedent set will be closely studied by governments and regulators around the world and will likely inform their eventual decisions on the matter. Facebook as shown it’s prepared to pay, but only under certain conditions.

It will also be interesting to see how all this has affected Facebook’s standing in Australia. A US tech giant has once more shown its inclination to act unilaterally, to the detriment of many of its users, which must be causing some of them to seriously consider alternatives. Claire Lehmann is the owner of independent Australian publisher Quillette and she’s not impressed.




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