Facebook warned Monday that it will prevent people in Australia from sharing news on its platform if the Australian governmentto force both it and Google to pay news organizations for content shared on their platforms.
The announcement comes after the Australian Competition and Consumer Commission released its plan for a mandatory code of conduct in late July. Under the plan, news organizations can negotiate with Google and Facebook over payments for their content — and if the groups can't reach an agreement after a three-month process, "an independent arbitrator would choose which of the two parties' final offer is the most reasonable within 45 business days."
Australia's Treasurer, Josh Frydenberg, said Facebook and Google could be forced to pay "substantial penalties" of hundreds of millions of dollars if they fail to adhere to the policy, according to the BBC.
Facebook said in a statement that the plan "misunderstands the dynamics of the internet and will do damage to the very news organisations the government is trying to protect."
"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 company 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."
Facebook also claimed that news organizations in Australia benefit more from their relationship with Facebook than the company does from sharing articles.
"Over the first five months of 2020 we sent 2.3 billion clicks from Facebook's News Feed back to Australian news websites at no charge – additional traffic worth an estimated $200 million AUD to Australian publishers," the company claimed.
Facebook also stressed that the remainder of the social networking service would remain unchanged in the country.
In an open letter, Google Australia claimed the regulation "could lead to your data being handed over to big news businesses." In the letter, Google Australia also alleged "The law would force us to give an unfair advantage to one group of businesses — news media businesses — over everyone else who has a website, YouTube channel or small business."
Under the proposal, media companies producing content that "investigates and explains issues of public significance for Australians; issues that engage Australians in public debate and inform democratic decision-making; or issues relating to community and local events," would be eligible for the negotiations. The organizations must also meet "minimum levels of professional editorial standards," maintain editorial independence, operate in Australia, and generate more than $150,000 AUD per year.
The government said in July that the plan is designed to address the "acute bargaining power imbalances between Australian news businesses and Google and Facebook."
"News content brings significant benefits to the digital platforms, far beyond the limited direct revenue generated from advertising shown against a news item," commission chair Rod Sims said in the summary of the proposal. "News media businesses should be paid a fair amount in return for these benefits."
Caitlin O'Kane contributed to this report.