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Facebook asks Australia to let it make content deals with news outlets before being hit with media code

Josh Taylor
·4-min read

Facebook has asked the Australian government to consider giving digital platforms a six-month grace period to make deals with news outlets to pay for content before hitting companies with the “big stick” of the news media bargaining code.

Ahead of Facebook’s appearance on Friday before a Senate committee examining the federal government’s news media and digital platforms mandatory bargaining code bill, the social media giant told the committee the code remained “complex, unpredictable and unworkable”.

Facebook argued instead, companies subject to the code which would require them to negotiate payments with news media companies for their content, should be given time to make deals separately before the code takes effect.

The company compared the proposed change with the federal government’s “big stick” energy provider legislation.

Related: Australia's proposed media code could break the world wide web, says the man who invented it

“Given our success in reaching commercial agreements in other jurisdictions without the threat of regulation, we are optimistic that Facebook could reach commercial deals with major Australian publishers,” Facebook said in its submission.

“One possible way to allow this to happen would be to institute a grace period where digital platforms are given assurances they will not be designated (or subject to the threat of penalties or damages) if they enter into satisfactory commercial agreements with major news organisations within a reasonable period of time (say, six months).

“There could also be a requirement to support regional and local news (for example, through a competitive funding pool or grant round). Concepts like a grace period approach have been used in other laws, like the energy sector’s ‘big stick’ legislation.”

Under the code, if news companies and digital platforms like Facebook cannot make agreements on the amount to be paid, ultimately an arbiter will make the final decision. Facebook said this would “incentivise” news companies to make unreasonable claims, and meant the final figure would be “detached from commercial value”.

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The company also argued it would not be able to manage the amount it would have to pay because it could not determine how much content is posted on Facebook.

“Facebook is effectively compelled to acquire all news content at whatever price is determined,” Facebook said.

“Unlike every other regulated access regime, Facebook does not retain any discretion as to volume, for example, we cannot decide to manage liability by acquiring less content or no content from a publisher.”

The company also warned it believed it would potentially need to make up to 1,000 different agreements with media companies if those media companies sought to strike different agreements depending on the masthead – for example if Nine decided to negotiate separately for Nine News, Sydney Morning Herald, the Age and the Australian Financial Review.

Related: US attacks Australia's 'extraordinary' plan to make Google and Facebook pay for news

Australian tech company Atlassian has also weighed in on the proposed code, telling the committee in its submission that the code would “disrupt neutrality” on the internet by creating one special class that receives payment for links in search results.

“No other types of websites on the internet are paid in this way, for merely appearing in search results or on social media platforms. Legislation creating ‘government-favoured’ categories of websites will only disrupt neutrality on the internet, opening the door for other content to claim favoured status,” Atlassian said.

“Although the boundaries of the code … are narrowly drawn, the way in which [news media] as a category are ‘favoured’ through its application could open the door to other content owners seeking similar or equivalent favourable treatment outside of its terms.”

Atlassian said a 14-day notification period for alerting news companies to changes in the algorithm used in search results or news feeds would also be impractical because changes in code and algorithm happen on a daily basis.

The public broadcasters, ABC and SBS – which were initially excluded from the code before the government opted to include them – both raised concerns that the final legislation removes the obligation on companies like Facebook to empower news companies to better moderate user comments.

Both publishers noted that, without premoderation for comments, they have had to decide between having significant resources devoted to moderating comments as they appear, or not posting articles on contentious issues on Facebook.

Facebook will appear second before the committee on Friday, just after Google and before Nine, Newscorp, AAP and Guardian Australia. ABC and SBS are scheduled for the afternoon, along with the Australian Competition and Consumer Commission.

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