“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,”a statement from Facebook‘s Australia and New Zealand managing director Will Easton said.
“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.”
Mr Easton took aim at the Australian Competition and Consumer Commission (ACCC), which developed the draft code, accusing it of ignoring the role social media played in promoting journalism.
He argued that in the first five months of 2020, users had clicked on Australian news items shared on the platform 2.3 billion times, which the company said generated $200 million in revenue for Australian media organisations.
Within a couple of years the likes of Google and Facebook will devour more than half local ad revenues, leaving only crumbs for traditional media players.
“When crafting this new legislation, the commission overseeing the process ignored important facts, most critically the relationship between the news media and social media and which one benefits most from the other,” Mr Easton said.
“News represents a fraction of what people see in their News Feed and is not a significant source of revenue for us.”
It is understood Facebook is still working through how any news ban would be implemented.
Facebook has also updated its terms of service, which come into effect next month.
Under the changes, Facebook would reserve the right to block information that could lead to “regulatory impacts” on it.
“We also can remove or restrict access to your content, services or information if we determine that doing so is reasonably necessary to avoid or mitigate adverse legal or regulatory impacts to Facebook.”
Facebook ‘heavy handed’, ‘misconceived’
In response, Treasurer Josh Frydenberg accused Facebook of making “heavy-handed threats” in an attempt to get its way.
“We’re committed to these reforms,” he said.
“We won’t be bullied, no matter how big the international company is, no matter how powerful they are, no matter how valuable they are.”
Mr Frydenberg’s language was echoed by his Cabinet colleague, Communications Minister Paul Fletcher, who said the views of all parties would be considered as the code was developed.
In a statement, ACCC chair Rod Sims labelled Facebook’s intervention “misconceived”, arguing many Australians relied on Facebook to deliver news for them.
“Facebook’s threat today to prevent any sharing of news on its services in Australia is ill-timed and misconceived,” he said.
“The draft media bargaining code aims to ensure Australian news businesses, including independent, community and regional media, can get a seat at the table for fair negotiations with Facebook and Google.
“We note that according to the University of Canberra’s 2020 Digital News Report, 39 per cent of Australians use Facebook for general news, and 49 per cent use Facebook for news about COVID-19.”
A spokeswoman for Nine Newspapers said Facebook’s response was “strange”.
“It is a demonstration of Facebook’s use of its monopoly power, while failing to recognise the importance of reliable news content to balance the fake news that proliferates on their platform,” she said.
“We are ready to engage and hope to come to a constructive outcome with Facebook which will work for both of us and, importantly, the Australian community.”
In the letter, Google argues its free services in Australia, such as its search engine and YouTube, could be under threat.
The media has long argued companies such as Facebook and Google benefit from the work of journalists, without paying for access to those stories or sharing any advertising revenue from their platforms.
The Government says its proposed laws are essential for creating a level playing field between local media and big internet companies.
Under the laws, Facebook and Google would be forced to negotiate payments with Australian media companies for their content.
If no agreement can be reached, they could be forced into an arrangement.
The code would also require Google and Facebook to give advance notice of any changes to their algorithms that could impact how news content was displayed.
It would also set a standard for how Google and Facebook shared data relating to how users accessed news content.
The ACCC had lashed out at claims made by Google it would have to start charging for its services, arguing that would only be as a result of the company’s own choices.
It also denied suggestions tech companies would be forced to hand over user data to media companies.
Labor’s communications spokeswoman Michelle Rowland said the Government needed to develop a “workable” proposal as it drafted legislation.
“Australia’s news media needs a workable code to support the sustainability of public interest journalism,” she said.
“It is the Morrison Government’s responsibility to land a workable code. The range of concerns held by all stakeholders demands a credible response from the Government.”
Public consultation on the code closed on Friday, with the Government now considering the feedback.