‘We don’t respond to coercion’: Josh Frydenberg stares down Facebook threat
Josh Frydenberg says he won’t be intimidated by Facebook’s scare tactics, after the tech giant threatened to block news content in Australia.
Treasurer Josh Frydenberg has declared he won’t be intimidated by scare tactics from Facebook and Google, after the tech giants threatened to effectively ban news content on their platforms if world-first regulation passes in Australia.
Mr Frydenberg told The Australian that the government would push ahead with its plans to force the tech giants to pay media companies fairly for news, despite Facebook’s outburst on Tuesday.
“Australia makes laws that advance our national interest. We don’t respond to coercion or heavy handed threats wherever they come from,” Mr Frydenberg said.
“Our reforms to digital platforms are world leading and following a ground breaking 18 month inquiry by the ACCC.
“These reforms will help to create a more sustainable media landscape and see payment for original content.”
Facebook on Tuesday broke its silence on the proposed news media bargaining code, with the tech giant declaring it would be forced to block all news in Australia if the legislation goes ahead.
In a blog post Facebook’s Australia and New Zealand managing director Will Easton accused the ACCC of “misunderstanding the dynamic of the internet” and said Facebook would be left with no choice but to withdraw from news in Australia entirely, if it was forced to pay for publishers fairly for news.
“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,” Mr Easton said.
“This is not our first choice – it is our last. But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”
Mr Easton said that over the first five months of 2020 Facebook sent 2.3 billion clicks from Facebook’s News Feed to Australian publishers, traffic he said was worth an estimated $200m to those media companies.
‘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.’
The tech giant also alerted users globally that it would be changing its terms of service, to “remove or restrict access to your content, services or or information if we determine that doing so is reasonably necessary to avoid or mitigate adverse legal or regulatory impacts to Facebook”.
‘Ill-timed and misconceived’
ACCC chair Rod Sims described Facebook’s threats as “ill-timed and misconceived.”
“Facebook already pays some media for news content. The code simply aims to bring fairness and transparency to Facebook and Google’s relationships with Australian news media businesses,” Mr Sims said.
“We note that according to the University of Canberra’s 2020 Digital News Report, 39 per cent of Australians use Facebook for general news, and 49 per cent use Facebook for news about COVID-19.
“As the ACCC and the government work to finalise the draft legislation, we hope all parties will engage in constructive discussions.”
Professor Allan Fels, the former chair of the ACCC, told The Australian that instead of making threats, Facebook should engage in constructive discussions with the both the regulator and the government.
“It‘s normal when the ACCC proposes action that those potentially affected threaten job losses, investment strikes, bankruptcy, withdrawal from the country and so on,” he said. “Experience shows that a smarter way to do business is to engage in serious negotiations with the ACCC. Usually the valid concerns are resolved.
“The ACCC would clearly have been aware that Facebook and others have withdrawn in somewhat similar circumstances overseas and have framed a law that will be harder to avoid. “Also they are carrying in their back pocket the option, if all else fails, of a general ten per cent tax on digital revenue and that would be a precedent the platforms would want to avoid.”
Facebook’s move comes after fellow tech giant Google began bombarding Australian Google users with a pop-up notification whenever they do a Google search, saying “the way Aussies use Google is at risk”.
Google and Facebook will both be covered by the mandatory code announced last month, and will have to pay media outlets for news, and face fines of up to $10m if they fail to treat Australian media companies fairly.
The digital platforms will also be required to give media companies 28 days’ notice if algorithm changes are likely to materially affect referral traffic to news, and publishers will need to be informed of substantial changes to the display and presentation of news.
The Australian reported last week Senators and MPs had been flooded with emails, each containing the same body of text calling the mandatory bargaining code an “assault on Australia’s democracy”.
Treasurer Josh Frydenberg has said the changes would address the “very unequal bargaining position between Australian news media businesses that produce original content and the digital platforms”.
“As the power, the wealth, the influence of these digital platforms, namely Google and Facebook, has grown, our regulatory framework has not kept up,” the Treasurer said, adding that for every $100 spent in Australia’s $9bn-a-year online advertising market, $47 went to Google, $24 to Facebook and $29 to other participants.
The pending bargaining code legislation is expected to have bipartisan support. Labor’s media spokeswoman Michelle Rowland said in a statement, “Australia’s news media needs a workable code to support the sustainability of public interest journalism.
“Labor is continuing to consult in anticipation of the introduction of legislation into the parliament.”
Peter Lewis, director of the Australia Institute’s Centre for Responsible Technology, said Facebook has a pattern of behaviour of treating democracy with contempt.
“Rather than working with the federal government to give effect to the ACCC to build a sustainable model for the Australian media, Facebook is threatening to block it from its platform. This has been the consistent response by ‘Big Tech’ where democratically elected governments have sought to protect the interests of their citizens,” he said.
“This builds on Facebook’s refusal to ensure truth in political advertising or proactively moderate divisive and destructive content on its site.
“In fact, if they follow through on this threat Facebook will removing trusted journalism from its site allowing disinformation and conspiracy theories to flourish.”
The stand-off is also being watched globally. Facebook on Tuesday denied Australian media interviews, instead dropping news of its threats to US outlets, highlighting the global nature of what’s at stake.
“Facebook‘s threat to block real journalism from its properties is simply an attempt to bully the Australian government and legislature. It is also a clear attempted exercise of their massive, anticompetitive market power. I suspect the Australian authorities won’t be easily intimidated,” David Chavern, President and CEO of the US-based News Media Alliance, told The Australian.
“And without quality news and information, all of Facebook‘s problems with misinformation would just become much worse. They would be taking away the only real balance for all the crazy rumors and conspiracy theories that they deliver.
“They should, instead, embrace quality journalism as an answer for many of their issues and offer Australian publishers better and more economically sustainable ways to deliver it to the public.”
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