Facebook ‘prioritis[ing] other countries for investment’ unless code is changed

Facebook has confirmed it is “prioritis[ing] other countries for investment until we understand the impact” of the News Media Bargaining Code, and will not roll out Facebook News in this market unless the legislation is changed.

In a blog post published this morning,  on the company’s website the social media platform’s local managing director, Will Easton, claimed that, in its current form, the proposed law could “expose Facebook to more than 1,000 standalone commercial arrangements”.

Will Easton

“There’s no other law like this in Australia,” Easton wrote.

“No other business is forced into a highly uncertain binding arbitration process where the government decides who enters these agreements and forces payment from the provider of a free service.”

The blog contains Easton’s first significant comments since Facebook threatened to pull news from its platform last September. The proposed code would impact, and is strongly opposed by, both Facebook and Google, but the latter platform has been more outspoken against the legislation introduced to parliament at the end of last year.

Google’s managing director Mel Silver has said the code is “unworkable”, and would “break” its search engine. 80% of the 426 submissions to the Australian Competition and Consumer Commission (ACCC),  “flag significant concerns” about the code, according to Google’s analysis.

Now, Easton has added Facebook’s voice to Google’s relentless campaign against the code, which is widely supported by news publishers, especially large media companies such as Nine, News Corp, and Seven.

“It [the code] also allows publishers to decide what they share on Facebook without setting any limits or caps on the volume of content we’re compelled to pay for,” Easton said.

“In fact, the Australian Government itself estimates that at least 75% of bargaining processes will be forced to proceed to binding arbitration. This fails to achieve the original goal of encouraging genuine bargaining between both parties.

“Beyond that, it allows an estimated 100 to 200 broadly-defined eligible news organisations to make deals as individual mastheads and digital channels. This could expose Facebook to more than 1,000 standalone commercial arrangements depending on how publishers use our service.”

Easton is adamant that the code “fails to acknowledge the commercial and technical realities of how publishers use Facebook and the value we provide to them” but also “does not provide solutions that will help the news industry over the long-term”.

Facebook has partnered with 30 local news companies over the past 2 years, and, through its news feed, sent 4.7 billion clicks to Australian news sites between January and November last year. Facebook said this free service is “worth an estimated A$394 million to Australian publishers”. The social media platform’s tools – such as In-Stream Ads which play during videos – meanwhile, are said to have been worth A$5.4 million to Australian publishers across the same period last year.

Easton said the company wants to launch Facebook News in this market to support publishers further, “but could only do so with the right rules in place”.

Facebook News is launching in the UK later this month, and will then expand to France and Germany later in the year. According to Easton, “this was achieved through open, good faith commercial deal-making that reflects the value offered by Facebook without the need for binding arbitration” that the code mandates.

Australia will not be part of that roll out unless the legislation is changed.

“With the right rules in place, we will invest more money and expand our tools and programs to help news businesses adapt to the changing digital landscape and ensure our community sees news that is relevant and meaningful to them,” Easton confirmed.

“Over the next three years, we will continue to support the global news ecosystem by investing hundreds of millions of dollars to expand the roll out of Facebook News, and launch new accelerator programs and subscription revenue products. We hope with changes to this legislation Australia will be part of this expansion.”

Some in the industry support Facebook and Google’s view of the code, including S4 Capitol’s Sir Martin Sorrell, and the inventor of the World Wide Web, Sir Thomas Berners-Lee, who wrote in his submission to the Senate Committee that elements of the code would “undermine the fundamental principle of the ability to link freely on the web”.

Facebook’s Hunter

Small publisher CarExpert was particularly vocal in it support of the platforms, attributing much of its success (and the success of the co-founders previous business, CarAdvice) to Google and Facebook.

Facebook is also certain it supports and invests in publishers. Earlier this week, Facebook’s Andrew Hunter, who heads news partnerships across Australia and New Zealand, published a separate piece detailing the benefits of its journalism Accelerator program, which was delivered in partnership with The Walkley Foundation.

Eight Australian and three New Zealand news companies received funding, and three months worth of coaching from experts including former Dow Jones marketing executive, Lynne Brennen, former Financial Times marketing leader, Joss Cripps, and former New York Times and Washington Post audience development leader, Justin Bank.

Participating outlets attracted 24,000 new paying subscribers and more than 160,000 new readers, Hunter claimed, worth $7 million in lifetime value.

The Walkley Foundation’s CEO, Louisa Graham, agreed the program was “incredibly valuable” for publishers.

Schwartz Media’s The Saturday Paper was part of the initiative, which it said was likely to have “contributed to our increase in subscriptions this year”. Across its titles, Schwartz Media has signed up 10,000 new subscribers, more than 50% above its forecast.

The Australian participants also included: News Corp’s regional division, The Guardian, Seven’s The West Australian, The Conversation, Australian Community Media, InDaily, and Crikey. A number of those outlets also have deals with Google.

In late 2019, outlets including Junkee, Nine, SBS, Seven, Sky News and Ten also entered into exclusive content partnerships with Facebook.


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