Facebook closer to media deals as it weighs backdown on ‘poison pill’ clauses

Facebook is one step closer to striking deals with some of Australia’s largest media companies after conceding it could change or remove previously non-negotiable “poison pill” clauses in contracts that would allow the tech giant to walk away from any deals.

The $764 billion ($984 billion) tech giant has been trying to strike commercial deals with large media outlets such as News Corp Australia, The Guardian’s local operations, the ABC and Nine Entertainment Co for use of news articles on its platform for several weeks to avoid being punished under new media bargaining laws. It has failed to do so because of the inclusion of clauses that allow it to blow up the agreements at any point in time.

Talks between some media companies and Facebook are finally progressing.Credit:

Industry sources who spoke anonymously because talks are confidential said Facebook has now told media companies it may be able to remove or change these provisions, a sign that it may strike deals in a matter of weeks if there is enough money on the table. The “poison pill” clauses were previously considered non-negotiable for the tech giant and raised concerns among media companies that attempts to strike deals were not genuine. Facebook declined to comment.

Removal of these clauses, which are the sticking point in talks with publishers such as Nine (owner of this masthead) and News Corp, could be enough to get an agreement or letter of intent signed. Other outlets such as Guardian Australia and the ABC are still having issues with the amount of money being offered, according to people familiar with the confidential discussions.

The tech giant has signed letters of intent with several companies including Seven West Media, Solstice Media, publisher of The New Daily and Private Media, publisher of Crikey, since it reversed a ban of articles on its platform in late February.

Facebook pulled news articles from its website in a stand-off with the federal government over proposed media bargaining laws. It restored them after securing 11th-hour amendments to the news media bargaining code.

ABC managing director David Anderson is expected warn in a speech at La Trobe University today to detail how audiences responded to the recent Facebook news ban.

He will warn there is no guarantee an international digital platform provider won’t turn its back on Australia again in the future and such a possibility should serve as a clear reminder to all media outlets of the need to be vigilant in protecting free access to public interest journalism.

Mr Anderson has said publicly said and given an assurance to the federal government that any revenue generated from Google or Facebook will be reinvested in public interest journalism in rural and regional communities.

The code, which became law at the end of February, sets out a framework that forces Google and Facebook to broker commercial deals with media companies for the value they gain from having news content on their platforms.

If Facebook can sign commercial agreements with media companies it will avoid punishment because the code does not formally apply to it. Treasurer Josh Frydenberg decided to hold off making the regulation formally apply to Facebook under a range of amendments agreed put in place to get Facebook to restore news articles.

Commercial agreements with Google are expected to be formalised in the next week. Google had initially inserted a similar termination clause into its agreements but dropped it after amendments were made to the laws. Seven, Nine, Guardian Australia and News Corp have since signed letters of intent with the search engine on commercial terms which were expected to be put into legal binding contracts following a 30-day period. Seven signed a letter of understanding with Google on February 15.

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