Regulators keep close eye on Facebook’s deal with Australia

Facebook and Australia’s eleventh-hour agreement Monday letting users resume sharing news links on the platform is being closely watched by regulators around the world as a possible model for requiring the social media giant to pay for news content on its site.

The relationship between the power of tech platforms and the steep decline in news media revenue has become a key issue for lawmakers in the U.S. and abroad, with many proposing changes that would strike at the digital ad market dominance of social media firms.

Lawmakers and regulators alike are now keeping a close eye on how things pan out in Australia, the first major economy to force the news payment issue with Facebook.

Facebook last week blocked user access to news links in Australia in response to legislation making its way through the Australian Senate that would require digital platforms to pay publishers for news content that appears on their sites.

If platforms and publishers failed to agree to a price, the process would be punted to a government-led arbitration process that would lock in one of the proposed prices.

Facebook will begin letting Australian users share news again in the coming days after an amendment was introduced giving the platform more time to negotiate deals and potentially letting it sidestep the requirements by investing in local journalism instead.

The apparent truce may be short lived.

“Going forward, the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation,” Campbell Brown, Facebook’s head of news partnerships, said in a statement late Monday night.

To some observers, the agreement after Facebook’s initial decision to pull out shows the sway social media platforms hold over efforts to have them pay for news.

“[Facebook] flexed and they used their market power,” said Jennifer Grygiel, an assistant professor of communications at Syracuse University. “I hope that other regulators around the world are showing that Facebook can disrupt the news in a way that’s not good for the public.”

During the period when links to news articles were blocked in Australia, Facebook users were flooded with misinformation about the coronavirus and conspiracy theories about aliens that filled the gap left by traditional media and other trusted sources that were swept up in the ban.

Several other countries are considering rules similar to Australia’s that would direct money from social media giants to news outlets.

Canadian Heritage Minister Steven Guilbeault, who is crafting legislation set to be unveiled later this year, told reporters last week that he would not be deterred by Facebook pulling news links from its platform.

“Canada is at the forefront of this battle … we are really among the first group of countries around the world that are doing this,” he said in comments reported by the CBC.

Guilbeault added that Canada has been in discussions with several other countries — up to 15 — about establishing rules that could collectively pressure Facebook and Google to comply.

France is one of those countries, after it adopted a stringent copyright directive by the European Union and its competition regulator ruled that Google must pay publishers for reusing their content in search results. Google agreed to negotiate licenses with French news sites last month.

Microsoft announced Monday that it is partnering with European publishers to develop an arbitration system similar to Australia’s across the continent. The EU and United Kingdom are both seeking to bring in parts of Australia’s system to upcoming laws as well.

Such efforts, however, are not as advanced in the U.S.

Sen. Maria Cantwell (D-Wash.), the new chairwoman of the Senate Commerce Committee, has said more ad revenue should be going to news outlets, not social media platforms.

And an expansive report produced by Democrats on the House Judiciary Committee last year pointed to the dominance of Facebook and Google, saying they have “harmed the quality and availability of journalism.”

But there are currently no proposals in the advanced stages similar to the one in Australia.

Still, the growing international consensus that dominant digital players should pay up for news is only likely to continue, according to Columbia University’s Anya Schiffrin.

“The bottom line is that Facebook and Google need to give way more money to news outlets,” said Schiffrin, director of the university’s technology, media and communications specialization.

“It doesn’t really matter whether it’s through copyright like France is doing or paying for links like Australia is doing.”