After initially staying out of the fray and letting Google go on the offensive, social giant Facebook has now gone nuclear over the government plan to force it into revenue-sharing deals with media companies.
In a blog post dropped to US media, Facebook has threatened to ban Australian users from sharing local or international news content on Facebook and Instagram if the federal government goes ahead with its planned bargaining code legislation.
This legislation, released in draft form earlier this year, would require Facebook and Google to negotiate a revenue-sharing deal with media companies for content posted on their platforms. If a deal isn’t reached in three months, the two parties will have to enter forced arbitration, with independent panel members picking one of the two final offers.
The code would also require the tech companies to provide advance notice of relevant algorithm changes and more information on the data it collects on news readers.
Google launched a public attack on the code, which is being led by the Australian Competition and Consumer Commission (ACCC), introducing pop-up notifications on Search and YouTube warning users that those services were “at risk”.
The tech giant is attempting to garner public support for its fight against the code from around the world.
Facebook has now entered the very public spat, with its managing director in Australia Will Easton threatening that all Australian users would be banned from posting any news content if the legislation gets passed.
“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.
“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 the draft code “misunderstands the dynamics of the internet and will do damage to the very news organisations the government is trying to protect” and that it “ignored important facts”.
“The proposed law is unprecedented in its reach and seeks to regulate every aspect of how tech companies do business with news publishers. 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,” he said.
“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.”
But the ACCC proposal clearly outlines how an independent arbitrator would select either Facebook or the media company’s final offer if an agreement isn’t reached, rather than the publisher directly setting the price.
In the post, Facebook repeated previous claims that media companies get a lot more out of the relationship than the tech company does.
“News represents a fraction of what people see in their News Feed and is not a significant source of revenue for us,” Mr Easton said.
The post was accompanied by a one-page information sheet detailing five reasons why Facebook doesn’t support the legislation.
According to Facebook, the code would force it into a “one-sided, binding arbitration process” that would require it to pay for news at a level “far beyond” its value, and that this process is “purposefully skewed” in favour of the news company.
Google has also slammed the proposal, saying its services such as Search and YouTube would be “dramatically worse” under the legislation and making efforts to garner support for its fight against the code around the world.
The ACCC quickly rebuked Google’s claims and said the tech giant was spreading “misinformation” over the draft code.
Consultations on the draft code closed at the end of last week.