Facebook is publicly ramping up the battle with the Australian government over pending legislation that would force it to pay royalties for use of copyrighted news content. 

It’s a battle being watched closely in both media and tech circles because the implications go farther than just what’s happening in Australia. The tech giants likely fear such legislation spreading in other places. There are already other proposals in the E.U.

The proposed internet reform law under consideration could require platforms, such as Facebook or Google, to pay royalties for news sourced from local publishers.  It would also require Google and Facebook to provide advance notice of algorithm changes and user data – and suggests significant penalties for failure to comply.    Violations could go as high as 10% of annual gross revenue.

Both Google and Facebook have said that would give an unfair competitive advantage to news organizations.

Here’s a draft of the legislation if you want to read it yourself.

Facebook’s answer?  We’ll take our ball and go home.  Instead of complying, the social media company said it will simply stop allowing publishers and others from sharing news on FB and Instagram.

“Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram. This is not our first choice – it is our last. But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.” – Will Easton, Managing Director, Facebook Australia & New Zealand, said in a blog post.

Here are Facebook’s talking points that they’re distributing.  They claim the Australian government misunderstands “the dynamic of the internet.”

For its part, Facebook says the Australian Competition and Consumer Commission (ACCC) has it wrong.  It’s the publishers that benefit not Facebook.  During the first five months of 2020, FB reports, it sent 2.3 billion clicks from its news feed back to Australian news websites.

“The ACCC presumes that Facebook benefits most in its relationship with publishers, when in fact the reverse is true. News represents a fraction of what people see in their News Feed and is not a significant source of revenue for us.” – Will Easton, Managing Director, Facebook Australia & New Zealand

As part of the company’s PR push, Facebook’s Campbell Brown took the time to outline all of the programs Facebook says it has in place to help journalists through the Facebook Journalism Project.

Google Shares Similar Concerns

Facebook public threat came after Google turned up the volume on its publicity machine earlier claiming that the legislation will hurt public access to Google Search and YouTube

“There are several areas that deeply concern us about this proposed law because it prioritises the traditional news industry over smaller creators of content and the platforms where they find an audience.” – Google’s Australia Blog

You can read Google’s talking points here.

ACCC Open Letter

The ACCC responded with this open letter to Google with the pronouncement:  We don’t like bullies.

“With success comes responsibilities and right now our Government, as our elected representative, is asking you to act beyond your narrow commercial self-interest,” the ACCC writes.  “You are using your power as one of the largest companies on earth to threaten us.”

All of this went public after private conversations broke down.  Reports are that the discussion got heated.

Other Legislation Under Consideration

The EU’s copyright law of 2019 required member countries to adopt rules that would require tech companies to pay publishers.  It also requires companies such as Twitter, Facebook, and Google to take more responsibility for copyrighted material that’s shared without permission.  It would make the tech companies liable for failing to filter or remove copyrighted material.   Google has threatened to remove news from any EU country that complies.

France also has pending legislation required tech firms to negotiate with publishers – or face regulation.  Its legislation would force Google to pay publishers for use of previews or snippets of content.

If we can look to history as a guide, when Spain enacted a similar measure in 2014, Google News exited the country.