Facebook is still “very willing” to pay Australian news publishers for their content but argues the current news media bargaining code is getting in the way.
In the company’s submission to a Senate inquiry on the code, which was detailed last month, Facebook says that by forcing it to pay for news in a way that isn’t “connected to commercial reality”, the code has deterred it from investing in the local news market.
For example, the social media giant shelved plans to roll out Facebook News in Australia, which was set to be the first market outside of the US to receive it in late 2020, until the full implications of the code became clear.
“The bill is not, as its name suggests, a bargaining code: it removes the potential for genuine bargaining by forcing Facebook to make payments that are detached from true calculations of commercial value and by incentivising news publishers to make unreasonable ambit claims and bargain in non-commercial ways," Facebook says in its submission.
"It removes any meaningful influence over our own commercial dealings with publishers.”
Facebook argues the code is “very challenging” to work with because of the interaction between six different and “fundamentally” flawed components of the law.
These include; a compulsion to enter into agreements with every eligible Australian news publishers, an overly-broad definition of who qualifies as a publisher, full autonomy for publishers to structure their dealings with Facebook, instructions for arbitrators to consider a set of factors that are skewed in favour of publishers, the use of final-offer arbitration, and a non-differentiation clause which limits digital platforms’ ability to offer more appealing commercial terms to certain publishers.
In its recommendations, Facebook suggests the government needs to significantly rework the legislation. The company also suggests a “grace period”, of about six months, where digital platforms are given assurances they will not be designated, or subject to the threat of penalties or damages, if they enter into satisfactory commercial agreements with news organisations within a reasonable period of time.
“Because our concerns arise from the complex interaction between six different and fundamentally flawed components of the law, it is not simple to address our concerns with the legislation,” Facebook says.
“We believe significantly more concerted work is required to make the legislation a workable scheme that reflects commercial realities.
“In fact, if the Government were able to give Facebook a period of time to strike commercial deals on our own (without the overhanging threat of dire new regulation), we believe we would be able to strike agreements with news publishers that would demonstrate policymakers’ concerns could be resolved without such strident regulatory intervention.”
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