Australia’s competition chief announces victory after confrontation with Facebook

Frontpages of Australian newspapers feature stories on Facebook in Sydney on February 19 (AP pic)

Canberra: The architect of Australian media reforms that are being watched around the world declared his victory on Wednesday, even as critics said concessions to laws that force major tech companies to pay for news content have given Facebook and Google an exit clause.

The Australian government made late changes to laws after Facebook last week banned news content in Australia, escalating the dispute over the proposed legislation and attracting the attention of the international community.

The amended legislation is expected to pass in the Senate this week, despite opposition from some smaller opposition parties and independent politicians who argue it hurts smaller news companies.

Rod Sims, chairman of the Australian Competition and Consumer Commission, told Reuters that the imbalance of bargaining power he was assigned to have been addressed.

“The changes the government has made are things that either don’t matter much or just to clarify things that, at least on Facebook’s mind, weren’t obvious,” said Sims, who led the drafting of the legislation.

“Whatever they say, they need news. It keeps people on their platform for longer – they make more money.”

As Australia’s reforms served as a model for other countries to embrace, Facebook was also eager to claim victory.

Global News Partnerships vice president of Facebook Campbell Brown stressed that the company retained the ability to decide whether news appeared on its platform and could avoid mandatory negotiation to push content under the original legislation.

In a major amendment to the legislation, Treasurer Josh Frydenberg has been given discretion to decide whether Facebook or Google will not succumb to the code if they are making “a significant contribution to the sustainability of the Australian news industry”.

The original legislation required Facebook and Alphabet Inc to submit to arbitration if they could not reach a trade deal with Australian news companies over their content, effectively allowing the government to set the price.

Facebook, which claims news accounts make up only 4% of the traffic on its Australian site, has said it will restore news on Australian pages in the coming days.

This is not a must-have system, Sims said. “We never said we were forcing Facebook to keep running the news.”

Small media, big concerns

While the Senate is expected to pass the legislation, with the main opposition Labor party supporting the ruling Liberal Party, some politicians and media companies have expressed concern about the amendments.

“This changes the bill dramatically,” Rex Patrick, an independent senator who intends to vote against the amended bill, told Reuters.

Big players can successfully negotiate with Facebook or Google. Then the minister does not appoint them, and all the young players miss them. “

Lee O’Connor, owner and editor of the regional newspaper The Coonamble Times, agreed that the amendments were in favor of large media groups.

O’Connor said, “The ambiguity of language is a constant concern, and the freedom of a minister is part of that.”

Frydenberg said he will give Facebook and Google time to strike deals with Australian media companies before deciding whether to enforce its new powers.

Content deals

The code is designed by the government and competition regulator to address the power imbalance between social media giants and publishers when negotiating payment for news content displayed on tech companies’ websites.

After Google initially threatened to pull its search engine out of Australia, it instead struck a series of deals with several publishers, including a global news deal with News Corp.

TV broadcaster and newspaper publisher Seven West Media said Tuesday that it has signed a letter of intent to strike a content supply deal with Facebook within 60 days.

Rival Nine Entertainment Co also revealed on Wednesday that it is in negotiations with Facebook.

Nine CEO Hugh Marks told analysts at a company news conference on Wednesday, “At this point, we’re clearly still in negotiations.” “It’s really positive for our business and especially positive for the publishing business.”

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