Law about News ban by Facebook in Australia

On Thursday, Australians woke to unobscured the fact that Facebook had banned all news media publication based/operating in Australia. The ban was due to the recent media code introduced in the house of representatives which according to Facebook may prove to be a financial liability for them.

Facebook have said that the law, which needs to be passed by the Senate, “fundamentally misunderstands the relationship between our platform and publishers who use it”.

In response to the actions committed by Facebook, Australian Prime Minister Scott Morrison used his Facebook page to react, saying: “Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing.”

So first lets understand what does the proposed law say.

What does the law say ?

On Wednesday, Australian parliament was enlightened with the world’s first media legislation, which obliges Facebook to owe a certain amount of payment to news media outlet in Australia, in order to reciprocate the intensive usage of news content on Facebook’s newsfeed.

According to the Australian government and its supporters this law was necessary in order to aid the financial loss accommodated by traditional and digital media companies based in Australia. For example, facebook accounts for 28% of the total expenditure on online advertising, Google makes up for around 53% and rest everyone just 19%. According to a report by Australian Competition and Consumer Commission, each of the corporations generated an estimate of 4.3bn$ and 0.7bn$. The code aims to ensure that news media business are fairly remunerated for the content they have published.

Although the lays out a framework which will allow them to bargain about the sum of amount they owe to media outlets. But if they refuse to agree, an arbiter will implicate the “final offer arbitration” in order to finalise the size of remuneration. A refusal from any side of the agreement will result in a penalty of $10m, or 10% of annual Australian turnover, or 3 times the profit collected.

What does this mean for Facebook ? and what was their response ?  

If this law is passed facebook would be required a pay a sum of money to all news outlets who own a Facebook profile. 

In response to the new propose law, Facebook has forbidden all publishers and people in Australia from publishing or viewing any form of content which suits the definition of “news”. Various sources have even reported the obliteration of Government depts profiles. Even international news agency have been banned Australian province.

“As the law does not provide clear guidance on the definition of news content, we have taken a broad definition in order to respect the law as drafted,” a Facebook spokeswoman said.

Over the years, facebook have been criticized for its impact on news distribution but ut argues that it has helped many publications to expand their reach, a Facebook spokes person said that “In fact, and as we have made clear to the Australian government for many months, the value exchange between Facebook and publishers runs in favor of the publishers – which is the reverse of what the legislation would require the arbitrator to assume. Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.”

Facebook believes it offers much more benefit to news companies than news companies offer to Facebook. The company’s head in Australia and New Zealand, Will Easton, said in a blog post announcing the block that news content accounts for less than 4% of content people see in their news feeds, while Facebook accounted for 5.1bn clicks to Australian news websites in 2020.

Facebook argues this value isn’t taken into account in how the negotiations are structured in the proposed news code.

Facebook has hit the nuclear button to try to show media companies how little news means to Facebook – and how much it might affect traffic to news sites if they were suddenly cut off.

For Facebook’s part, it advocates the fact that news content only account for around 4% of the total content circulated on platform. 

How are Australians reacting ?

Facebook’s actions have divided opinion across the country, with some indifferent, and others angry. The #deletefacebook hashtag was trending on Twitter in Australia on Thursday.

When removing news pages from its platform, Facebook also inadvertently pulled pages for dozens of charities, state health organizations, small businesses, and a weather bureau.

Sydney resident Fred Azis-Laranjo told CNBC that he thinks Facebook’s decision will “massively backfire” and that Facebook will lose fans and customers in Australia as a result.

“It will inconvenience and annoy a huge group of the population who get their news from their Facebook news feed,” he said.

“Longer term, I think it is a good thing if it encourages more people to seek news more proactively, which will likely mean they’re exposed to a greater diversity of views and will also likely benefit established news organizations over niche players.”

Josh Gadsby, director of client relationship management at Visa in Sydney, told CNBC that he cares and he thinks most other people in Australia do as well. Facebook exacerbated the situation by banning non-news pages, according to Gadsby.

“Having worked for the Financial Times for several years, I saw the impact Facebook and Google were having on ad revenues for traditional publishers and I think it’s reasonable for them to be expected to pay something to use content from publishers,” he said.

“Having said that there are two sides to the story and there’s a fair bit of negative press over here about this being driven by the government because they’re in Murdoch’s pocket,” added Gadsby.

Gadsby believes that Facebook should have negotiated a deal with publishers. “It’ll be interesting to see what their next step is as personally, I think it’s unlikely the ban will be long-lasting,” he said.