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Australia passes media law as Facebook defends blackout

February 25, 2021

Facebook says it was asked to pay a "potentially exorbitant price" in a dispute with Australia over payments to media groups. Australian lawmakers have now officially passed the newly amended media law.

 In this photo illustration a message is seen on Facebook mobile, on February 18, 2021 in Melbourne, Australia. Facebook has banned publishers and users in Australia from posting and sharing news content
The rules only apply in Australia, but regulators elsewhere are likely to scrutinize whether the system worksImage: Robert Cianflone/Getty Images

Australian lawmakers on Thursday passed the final amendments to a new media law that forces tech giants like Google and Facebook pay for news.

Tweaks to the law were made after Facebook last week blocked access to Australian news outlets on its pages

Australian regulators have zeroed in on tech giants such as Google and Facebook for their online advertising dominance and their impact on struggling news media.

The original legislation would have forced firms like Facebook to pay media organizations for news shared on the social network.

The government can now assess whether companies like Facebook have made a contribution to the Australian news industry before deciding where payments are necessary. It also lets Facebook and other tech giants strike their own deals with local companies.

Ahead of Parliament passing the law, Facebook defended its blanking out of media outlet pages for Australian users, while pledging to invest at least $1 billion (€822 million) to support journalism.

Why did Facebook object to the planned law?

In a blog post on Wednesday, Facebook's head of global affairs Nick Clegg said that to comply with the law as originally proposed would be unworkable and unfair.

Clegg contended that a misunderstanding about the relationship between Facebook and news publishers was at the heart of the controversy.

He noted that news groups share their stories on Facebook and make them available for site users to share using buttons designed into news websites.

Former UK Deputy Prime Minister Clegg said Facebook drove some 5.1 billion such "free referrals" to Australian news publishers last year.

"We neither take nor ask for the content for which we were being asked to pay a potentially exorbitant price," he said.

In the post, Clegg said Facebook pledged to invest at least $1 billion to support journalism over the next three years. The post did not include details about the investment plan.

He said the firm was already working with publishers in the UK to pay for content in its Facebook News product, which personalizes news for its readers' individual tastes.

Seal of approval from law's architect

The architect of Australia's new media laws claimed victory, despite the last-minute changes which critics claimed had made too many concessions to the likes of Facebook.

Australian Competition and Consumer Commission Chair Rod Sims, who helped draft the original law, said the bargaining power imbalance had been righted.

"The changes the government's done are things that either don't matter much or are just to clarify things that, at least in Facebook's mind, were unclear," Sims told the Reuters news agency.

"Whatever they say, they need news. It keeps people on their platform longer. They make more money," he said.

Sims' approval of the amended law lends some weight to the government's argument that its hard line approach to the tech firms has worked.

How significant is the law globally?

The legislation could offer encouragement to other countries such as Canada and Britain which have said they could introduce similar laws.

While the rules only apply in Australia, regulators elsewhere are likely to scrutinize whether the system works and how it can be applied in other countries.

Some nations have introduced laws that force big tech giants to negotiate with media firms for payments for links that draw traffic and advertising revenue to their social and search platforms.

However, Australia is now the first country where a government arbitrator effectively sets the rates tech giants must pay if their negotiations with media companies are unsuccessful.

Richard Connor Reporting on stories from around the world, with a particular focus on Europe — especially Germany.