Facebook Unfriends Australian Government for Earthquaking Monopoly Board

On 18 February 2021, Facebook made good on its threat to block Australians from accessing, viewing or sharing Australian or International news content on the social media platform. This dramatic counterstrike by Facebook is in response to the Australian Government’s proposed introduction of the news media bargaining bill, which was Introduced to Parliament on 9 December 2020 as the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 (the Code).

The Code seeks to amend the Competition and Consumer Act 2010 (Cth) and establish a mandatory code of conduct to address bargaining power imbalances between digital platforms and Australian news businesses. The code is the Australian Government’s response to the Australian Competition & Consumer Commission Digital Platform Inquiry documenting an imbalance of bargaining power between digital social media platforms and Australian news providers. The Inquiry concluded that the wide reach, ease of publication, and low production costs offered by the digital social media platforms have severely undercut the advertising revenue of Australian news businesses.

The Code proposes to introduce:

  1. An obligation to bargain in good faith, with civil penalties for non-compliance;
  2. A compulsory referral to arbitration where negotiations fail; and
  3. A requirement for digital platforms to provide advance notification to news media businesses on any changes to its platform’s algorithm that will significantly impact news content.

The Code proposes to ensure the news media sector is sustainable by being fairly remunerated for its news content, and acts as a backstop to protect Australian businesses where negotiations with major digital platforms like Google and Facebook fall part. It would require these digital platforms to pay Australian news businesses for use of their news content. The Australian Government considers this intervention as necessary to protect the public benefit of the dissemination of information. These measures are said to prevent the monopolisation of the digital platforms through which news is shared without fair and reasonable remuneration.

What next for Digital Platforms?

In recent days, it has become evident that tech-giants Google and Facebook are taking strikingly different approaches to the proposed new measure. Recently, Google has entered into agreements with several Australian news businesses, including a $30 million annual deal with Nine Entertainment Co. Holdings Limited (trading as Nine Entertainment Co). According to the Federal Treasurer, Josh Frydenberg, such “fair deals” already demonstrate the efficacy of the Code in ensuring Australian media businesses are treated fairly.

Facebook, on the other hand, are yet to enter into any new agreements and have blocked Australian users from viewing or sharing any news content.

Nevertheless, the introduction of the Code as law in Australia is now inevitable and other nations around the world are keeping a close watch on Australia. If Australia can successfully show that the news media bargaining law operates well and fairly, then other nations may follow suit.

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