Facebook has announced it will ban publishers and people in Australia from sharing local and international news on Facebook and Instagram if a proposal to force tech giants to pay for news becomes law.
The new rules, strongly backed by Rupert Murdoch’s News Corp Australia, would force Facebook and Google to give news outlets a bigger cut of digital advertising revenue. It is the most aggressive effort yet by any country to curb Silicon Valley’s power over the news business.
As Facebook sees it, the new regulations are untenable. They would force the social network to enter into revenue-sharing agreements with publishers in which the final terms would be decided by independent arbitrators — and Facebook would have no recourse to back out of the deals.
“We tried to make this work,” Campbell Brown, Facebook’s head of global news partnerships, said in an interview. “We proposed our version of something workable. … Unfortunately, there are so many things in this proposed legislation that just make it untenable.”
In a post Monday night, Facebook said Australia had left Facebook with two choices: “removing news entirely or accepting a system that lets publishers charge us for as much content as they want at a price with no clear limits.”
“Unfortunately, no business can operate that way,” it said.
“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,” the post said.
News organizations around the world have long chafed at Facebook’s and Google’s takeover of the digital ad industry. The two companies account for more than half of the annual digital ad spending in the U.S. and more than 70 percent in Australia. That has left publishers scraping for smaller pieces of the pie, even as their content reaches larger and larger audiences.
In recent years, European countries have tried and largely failed to force the platforms to give more to publishers. When Spain enacted a law in 2014 forcing Google to pay for headlines and news summaries in Google News, Google removed Spanish news outlets, dealing a blow to the nation’s news industry. France and Germany have also tried and failed to bring Google to heel.
Australia’s new legislation goes further by establishing a panel of arbitrators who would determine the price that Facebook and Google must pay publishers. The platforms would have no recourse to exit the agreements, and they could face fines as steep as 10 percent of their overall revenue in Australia for each offense.
While news accounts for a relatively small part of Facebook’s and Google’s overall revenue, the ability to access and share news is seen as part of the appeal of the platforms. Facebook’s decision to deprive users of the ability to share news could thus have larger effects on its reputation, especially if other countries were to follow suit.