The Australian Competition and Consumer Commission is investigating a claim that Facebook Inc refused a publisher’s request to negotiate a licensing deal, setting the stage for the first test of the world’s toughest online content law.
The Conversation, which publishes academic commentary on current events, said it had asked Facebook to start talks as required by new Australian legislation requiring the social media company and Alphabet Inc’s Google to negotiate content-supply deals with media outlets.
According to The Conversation, Facebook declined without providing a reason, despite the fact that the publisher was among the first in Australia to secure a similar deal with Google in the run-up to the 2020 law.
The rejection could be the first test of a contentious mechanism unique to Australia’s effort to recoup advertising dollars from Google and Facebook: if they refuse to negotiate license fees with publishers, a government-appointed arbitrator may step in.
Facebook’s head of news partnerships for Australia, Andrew Hunter, said in a statement that the company was “focused on concluding commercial deals with a range of Australian publishers.”
Hunter did not respond to specific questions about The Conversation, but did say Facebook was planning a separate initiative “to support regional, rural, and digital Australian newsrooms and public-interest journalism in the coming months,” without providing any further details.
“If Google has made a deal with them, I don’t see how Facebook can argue that they shouldn’t,” said Rod Sims, chair of the Australian Competition and Consumer Commission (ACCC), in an interview.
“The issue of designation may need to come into play,” he said, referring to the process of appointing an arbitrator.
According to the law, the decision to designate a Big Tech firm for intervention is made by the treasurer, who is advised by the ACCC, but “an absolute ‘no’ for an organization that should be getting a deal is something we’ll look into,” Sims said.
The Conversation was “exactly what we had in mind with the Code,” he said, adding that the situation needed to play out before any further action was taken.
Governments all over the world are enacting legislation to require tech behemoths to compensate media companies for the links that drive readers – and advertising revenue – to their platforms. However, Australia is the only country where the government has the authority to set the fees if negotiations fail, which prompted Facebook to block newsfeeds in the country just before the bill was passed.
Treasurer Josh Frydenberg, who negotiated the laws with Facebook founder Mark Zuckerberg earlier this year, was not immediately available for comment.
Since the law went into effect, a number of the country’s largest media companies, ranging from News Corp to the Australian Broadcasting Corporation, have struck deals with the tech behemoths.
However, some small and independent publishers whose content draws four-fifths of Australia’s 25 million people to Facebook said the law created a two-tier industry in which rival titles owned by large parent companies secured deals while others did not.
Nelson Yap, publisher of the Australian Property Journal, which is on a government list of media businesses subject to the law, said he was in preliminary talks with Google but had emailed Facebook twice with no response.
He stated that he read Facebook’s public statements about communicating with publishers and “I’m sitting here thinking, with whom am I going? That is not the case with us. Despite our efforts, we have received no response. We’re all scratching our heads, unsure what to do next.”
A Facebook spokesperson declined to comment on any contacts with the Property Journal. Country Press Australia, a regional newspaper industry group, said it was in talks with Facebook on behalf of 140 publishers.
The Conversation editor Misha Ketchell said that “obviously we are disappointed that we haven’t been able to engage in negotiations with Facebook so far, but we remain optimistic that we will be able to reach an agreement”.
The ACCC’s Sims said the deal pipeline had “gone quieter than I would have envisaged” but urged smaller publishers to be patient.