Facebook rejects talks with Australia publisher, testing world’s toughest online law

June 25, 2021: Australia’s competition watchdog is looking into a claim that Facebook Inc refused a publisher’s request to negotiate a licensing deal,  setting the stage for the first test of the world’s toughest online content law.

The Conversation, which publishes current affairs commentary by academics, said it asked Facebook to begin talks as required under new Australian legislation that requires the social media firm and Alphabet Inc’s Google to negotiate content-supply deals with media outlets.

Facebook declined without giving a reason, The Conversation said, even though the publisher was among the first in Australia to secure a similar deal with Google in the lead-up to the law in 2020.

The knockback could present the first test of a controversial mechanism unique to Australia’s effort to claw back advertising dollars from Google and Facebook: if they refuse to negotiate licence fees with publishers, a government-appointed arbitrator may step in. In a statement responding to Reuters questions, Facebook’s head of news partnerships for Australia, Andrew Hunter, said the company was “focused on concluding commercial deals with a range of Australian publishers”.

Hunter did not answer specific questions concerning ‘The Conversation’ but said Facebook was planning a separate initiative “to support regional, rural and digital Australian newsrooms and public-interest journalism in the coming months”, without giving details.

“If Google’s done a deal with them, I can’t see how Facebook should argue that they shouldn’t,” Rod Sims, the chair of the Australian Competition and Consumer Commission, said in an interview. “The question of designation might need to come into play,” he noted, using the term for assigning an arbitrator.

Under the law, the decision to designate a Big Tech firm for intervention was made by the treasurer, which is advised by the ACCC, noted Sims, but “an absolute ‘no’ for an organisation that should be getting a deal is something we’ll look into.”

Governments around the world are introducing laws to make the tech giants compensate media companies for the links that drive readers – and advertising revenue – to their platforms.

But Australia is the only country where the government can set fees if negotiations fail, a factor that forced Facebook to block news feeds in the country before they could be approved. Treasurer Josh Freinberg, who discussed the rules with Facebook founder Mark Zuckerberg earlier this year, was not immediately available for comment.

The case also paints a grim picture of the impact of the law on the industry, which has been widely reported. Since its inception, a handful of media players across the country, from the News Corporation to the Australian Broadcasting Corporation, have struck deals with tech giants. But some small and independent publishers whose content helps draw a quarter of Australia’s 25 million people to the Facebook site say the law has created a two-tier industry where rival titles owned by large parent companies Secure contracts while losing others.

Nelson Yap, publisher of Australian Property Journal, which is on a government register of media businesses covered by the law, said he was in early discussions with Google but had emailed Facebook twice with no response. He said he read Facebook’s public statements about talking to publishers and “I’m sitting here going, with whom? Not with us. Despite reaching out, we haven’t heard anything. We’re all scratching our heads, trying to work out what to do next.”

A Facebook spokesperson did not answer a question about any contacts with the Property Journal. Country Press Australia, a regional newspaper industry group, said it was holding constructive talks with Facebook on behalf about 140 publishers.

“Obviously we are disappointed that we have not yet been able to negotiate with Facebook, but we are hopeful that we will be able to reach an agreement,” said Misha Ketchell, the Conversation’s editor. ACC’s Sims said the deal’s pipeline was “faster than I could have imagined” but urged smaller publishers to be patient.

“On the one hand, I’m concerned that people aren’t getting an answer to e-mails, on the other hand, I’ve seen it before and then things change and things happen,” he said.

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