‘Can’t pay? Won’t pay!’ says Facebook, as big tech calls Canberra’s news bluff

The first of the tech giants has called the bluff equally of the federal government and old media, with Facebook announcing today that it will stop allowing Australian publishers and users from sharing local and international news on Facebook and Instagram if a proposed code requiring Facebook pay for news posts becomes law.

Facebook will also exclude Australia from the roll out of the platform’s news tab, which has already seen payments to participating publishers including, in the US, News Corp.

The announcement follows the big tech playbook: can’t pay? Won’t pay!

It’s come as a shock. While Google has been actively mobilising its audience in opposition to the proposed mandatory code between big tech and old media, which would require payments for use of news in search or social media, Facebook has been remarkably quiet until today.

It came in an online announcement from Facebook’s Australia and New Zealand managing director Will Easton, with the vanilla heading: “An update about changes to Facebook’s services in Australia”:

“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.”

It’s not the first time big tech has gone on strike to protest regulations that cost it money. Google dropped its news search tab in Spain in 2014 when faced with copyright fees for its brief snippets, while car hire apps Uber and Lyft are threatening to leave California if they are forced to treat drivers as employees, which they claim will increase costs by 30%.

Facebook and Google say the justification for the Australian Competition and Consumer Commission’s mandatory code proposal gets it precisely back to front: “Over the first five months of 2020 we sent 2.3 billion clicks from Facebook’s News Feed back to Australian news websites at no charge — additional traffic worth an estimated $200 million AUD to Australian publishers.”

Sounds like a lot. But it’s a fraction of the day-to-day traffic across the social media giant. This traffic ( which “allows family and friends to connect” as Facebook says) will not be affected by the news boycott.

Facebook has been winding down its promotion of news. In early 2018, it tweaked its algorithm to prioritise posts from family and friends (and paid-for advertising) over news posts. The result? Traffic went up and news went down.

The draft legislation for the mandatory code was aimed at leveraging funding for old media — particularly News Corp which has been the driving force behind the proposal. Their Australian CEO Michael Miller has boasted of potential revenues of $1 billion.

It excludes the ABC and SBS from payments, but it also precludes the tech giants from picking favourites — it either allows all news, or no news. While commercial publishers use social media to draw traffic to their own sites, the public broadcasters don’t need to monetise their content. This allows them to meet their audience where they find it. As a result, their audiences are likely to be disproportionately affected by today’s announcement.

The draft code also provided old media with extensive rights to fore-knowledge or any algorithm changes that could affect them — a proposal that Google has said may allow companies to game the system over the interests of other organisations, including other media.

The code would also require Facebook to allow users to turn off comments — which Australian courts have found can lead to defamation claims against publishers. This would be a challenge to Facebook’s engagement (read: outrage) model.

News is often used by political actors to build their own outrage model, particularly within closed groups. A news-free Facebook will challenge that organising approach or see news increasingly replaced by fake news.

The Australian government (and old media) have been hyping the mandatory code as “world first” regulation that will set a model for other countries. Now, Facebook is testing a new world model, banking that a News Feed without news will be their best possible outcome. That will certainly be closely watched.

Will Facebook’s threats work? Will the ACCC’s code make online media a better place? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say section.