News Corp close to commercial deal with Facebook

News Corp is on the cusp of a commercial agreement with Facebook that would see the tech giant pay the media company for use of its journalism.

Details of a commercial agreement between Facebook and News Corp are likely to be announced in coming days. Picture: AFP

News Corp is on the cusp of a commercial agreement with Facebook that would see the tech giant pay the media company for use of its journalism on the digital platform.

It’s understood that talks between News Corp (publisher of The Australian) and Facebook have progressed significantly in recent days, despite some reports suggesting that the social media behemoth’s discussions with the major news publishers had stalled since February 23, when the Mark Zuckerberg-owned company over­turned a week-long ban on Australian users sharing news stories on its site.

But The Australian has learned that while there have been some serious “sticking points” that had to be sorted out over the past three weeks, the details of a commercial agreement between Facebook and News Corp are likely to be announced in coming days.

The mooted deal would be the culmination of several months of negotiations between the two companies, and would follow the introduction of the mandatory news media bargaining code, which was passed by parliament last month. The legislation ensures that large technology companies that operate in Australia pay local news publishers for the news content that is made available — or linked to — on their digital platforms. Should the tech giants not agree to such payments, they would be subject to final offer arbitration.

Payment-for-content agreements between fellow tech giant Google and Australia’s biggest news media companies, including News Corp, Nine and Seven West Media, were reached last month. Several smaller media outlets have also signed deals with Google.

But negotiations between Facebook and Australia’s media companies are said to have been more difficult than the parallel discussions with Google, notwithstanding the personal inter­vention of Treasurer Josh Frydenberg, who had several phone conversations with Mr Zuckerberg in the wake of Facebook’s decision to restrict access to news content for Australian users last month.

To date, Seven West Media is the only major media company to sign a letter of intent to provide news content to Facebook, although smaller organisations such as Private Media, Schwartz Media and Solstice Media also reached commercial agreements with the social media giant in February.

A spokesperson for Nine said the company “would not be making any ongoing commentary on discussions with Facebook”.

“As we said in regard to any discussions with Google, we will make announcements to the ASX when there are any deals that are material to our business.”

Neither ABC nor SBS have signed any commercial arrangements with Google or Facebook. A spokesman for the ABC said on Sunday that the public broadcaster’s discussions with the tech giants were “ongoing”.

The Guardian Australia also remains in talks with Facebook, but sources said a possible deal with the tech giant was still some way off.

Facebook did not respond to inquiries from The Australian on Sunday.

In a statement last week, Mr Frydenberg said the government expected all parties “to continue to work constructively towards reaching commercial agreements in the spirit of collaboration and good faith” as encouraged by the mandatory news media bargaining code, which was enshrined in law last month.

Under the code, the digital platforms will only be “designated” if the government deems that there is a major bargaining imbalance with news media organisations.

“Consideration on whether to designate a digital platform will be based on the progress they have made towards making a significant contribution to Australian public interest journalism and with respect to whether there is a significant bargaining power imbalance with Australian news media businesses,” Mr Frydenberg said.

That clause prompted speculation that some Australian news media executives were concerned that the government had given too much wriggle-room to Facebook at the negotiating table.

But the chair of Australia’s competition watchdog, Rod Sims, did not appear concerned by the absence of deals between most of Australia’s news media companies and Facebook when he was asked about the matter at a Senate hearing into media diversity on Friday.

“Hopefully we’ll get the deals done and if we get the deals done, then designation is irrelevant,” he said.