Facebook Cuts Off News in Australia in Fight Over Payments

(Bloomberg) -- Facebook Inc. has started restricting the sharing of news on its service in Australia, defying a controversial proposed law that would require technology companies to pay publishers when their articles are posted by users.

The ban constitutes the strongest action yet in response to the proposed legislation, which would force Facebook and Alphabet Inc.’s Google to pay publishers for the value their articles generate on the digital platforms. News outlets have demanded such payments, arguing they should be fairly compensated for their journalism as Google and Facebook capture much of the advertising market.

Facebook’s decision blocks those in Australia from sharing news stories and stops users globally from sharing articles from Australian publishers. The action threatens to cut off one of the most widely used ways for people to access news and information online.

It’s possible that Australia’s proposed law could set a precedent with other countries around the world that have watched Facebook and Google impact their respective news industries. While they oppose the measure in Australia, Google and Facebook have struck separate, voluntary agreements to pay publishers. Earlier Wednesday, Rupert Murdoch’s News Corp., a supporter of the Australian proposal, said it had reached a deal with Google for the search giant to pay for journalism from the Wall Street Journal and its other newspapers.

Josh Frydenberg, Australia’s Treasurer, tweeted that he had a “constructive discussion” with Facebook Chief Executive Officer Mark Zuckerberg on Thursday morning Australia time. “He raised a few remaining issues with the Government’s news media bargaining code and we agreed to continue our conversation to try to find a pathway forward,” he wrote. A Facebook spokeswoman didn’t immediately reply to a request for comment.

Last summer, Facebook had threatened to block people and publishers in Australia from sharing news on its main social network and Instagram if the legislation were to become law. Google has similarly threatened to shut its search engine in Australia.

Google Contrast

On Wednesday, Facebook tried to draw a contrast with Google, arguing that publishers don’t voluntarily provide articles that appear in Google search results, while they willingly post news on Facebook, which helps them reach a larger audience.

The Australian proposal penalizes Facebook “for content it didn’t take or ask for,” William Easton, managing director for Facebook in Australia and New Zealand, said Wednesday in a blog post.

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” he said. “It has left us facing a stark choice: Attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter.”

Publishers already reap tangible benefits from links on Facebook, Easton said. Last year, Facebook generated about 5.1 billion free referrals to Australian publishers, worth an estimated A$407 million ($315 million), he said, without providing a basis for the calculation.

What Is News?

Facebook said it will rely on machine learning software to determine what links are considered news. The software looks for “news-specific signals like timeliness, presence of bylines, and attributed sources” in an effort to predict whether something should be classified as news, according to a company help page.

It’s possible non-news stories, like opinion pieces, will also be restricted if they come from predominantly news-focused organizations, a spokeswoman confirmed.

Just 4% of the posts that people see in Facebook’s News Feed are news, the company said. Facebook previously cut back on articles in user feeds in early 2018 as a way to increase the number of posts that people see from friends and family.

©2021 Bloomberg L.P.