'Not our first choice': Facebook threatens to block news in Australia

Social media behemoth Facebook is threatening to ban news from being shared on its main app and Instagram in Australia in a major attack on a new regulatory code that would force it and Google to pay publishers for content.

Facebook Australia managing director Will Easton said the proposed legislation, which was announced by the competition regulator in July, misunderstands "the dynamic of the internet" and will damage news organisations.

Managing director of Facebook Australia Will Easton has launched a scathing attack on the local competition regulator.Credit: Louise Kennerley

"Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram. This is not our first choice – it is our last," Mr Easton said.

"We already invest millions of dollars in Australian news businesses and, during discussions over this legislation, we offered to invest millions more. We had also hoped to bring Facebook News to Australia, a feature on our platform exclusively for news, where we pay publishers for their content.

"But these proposals were overlooked. Instead, we are left with a choice of either removing news entirely or accepting a system that lets publishers charge us for as much content as they want at a price with no clear limits. Unfortunately, no business can operate that way."

If the tech giant progresses with this scenario, it would mean that users and publishers cannot publish or distribute any news articles on Facebook or Instagram.

Users were notified on Tuesday morning the company would update its terms of service on October 1 to allow it to "remove or restrict" access to content, services or information so it could avoid or mitigate any regulatory hurdles in Australia.

Facebook has been relatively silent since the Australian Competition and Consumer Commission released the first version of a news media bargaining code. Under the proposal, Google and Facebook will have three months to negotiate revenue-sharing deals with media companies before an independent arbitrator is called in to impose a compulsory arrangement. The code also includes a requirement to provide advance notice of algorithm changes and information on how and when Google and Facebook make data available for publishers. Penalties of up to 10 per cent of revenue could be applied if the tech giants fail to comply.

Mr Easton said the competition regulator's solution was "counterproductive" to supporting struggling news organisations and rejected presumptions that Facebook gains large amounts of value from the existence of news content in its feed. Last month, it put plans to launch Facebook News in Australia on hold.

"The proposed law is unprecedented in its reach and seeks to regulate every aspect of how tech companies do business with news publishers," Mr Easton said. "Most perplexing, it would force Facebook to pay news organisations for content that the publishers voluntarily place on our platforms and at a price that ignores the financial value we bring publishers."

Mr Easton's comments come weeks after Google went public with its concerns about the proposed legislation, asking users to lobby government. Responses to the ACCC about the proposed code were due last Friday.

Search engine Google, which will also be subject to the legislation, went public with its concerns and tried to rally users to lobby government. Google placed a warning message on its search page with a link to an open letter to users and asked YouTube influencers to complain to the government.

Google managing director Mel Silva said on Monday that it hoped its concerns would be heard. Australian media companies are supportive of the proposed code and are advocating for minor changes to ensure all types of news programs are able to be remunerated and to avoid Google or Facebook punishing publishers for receiving payments.