Facebook warned Monday that if Australia goes ahead with a law to charge digital publishers for sharing news items, it will block people there from sharing all content from news sites.
Why it matters: That threat may make business sense. But it could end up creating an even more toxic social network, in Australia and any other country that makes a similar demand, Axios' Sara Fischer and I report.
Catch up quick: Regulators in Australia released a draft code of conduct on July 31 for a consultation period that ended Friday. The final legislation is expected to be introduced to Parliament "shortly after conclusion of this consultation process," the Australian Competition & Consumer Commission says.
- The consultation process has been ugly, and has featured a lot of testy statements back and forth from Google, Facebook and Australian lawmakers.
Between the lines: From a business perspective, Facebook can clearly afford to make the move it is making. News isn't that large a generator of posts or revenue for the company there or elsewhere. The question is whether democratic societies can afford Facebook to take such a move.
- Things might be fine on a news-free Facebook if users responded by simply posting cute photos of their kids, but that's unlikely to happen.
- With legitimate news blocked, it's easy to envision a scenario where conspiracy theories, misinformation and highly partisan information replace independent, fact-based news.
- Facebook is already suggesting it will act similarly if other countries adopt laws it dislikes. It alerted users Monday night that, starting Oct. 1, it's changing its terms of service globally to assert the right to block content to "avoid or mitigate adverse legal or regulatory impacts."
- It's not just Facebook. Google has also warned users in Australia of a news blackout if the law is enacted.
Our thought bubble: As we've written, while it makes sense that different countries want to customize rules for online behavior, each such move further fractures the already strained global internet.
The big picture: If Australia adopts the law and it becomes a model for others around the world, publishers hope the approach would provide a significant boost to the news industry, especially local news, as it faces financial decline.
- Facebook and Google collectively take in more than half of digital advertising revenue.
Yes, but: History shows that tech giants don't take well to this type of law, and would rather pull out of a country altogether than be forced to pay publishers on terms set by lawmakers.
- Spain passed a similar measure in 2014 that ultimately caused Google News to leave the country.
- France is considering a law that would require Google to pay publishers for featuring "snippets," or small previews of their content, in search. Like Australia, France has ordered tech firms to negotiate with publishers or face being regulated.
- The EU passed a sweeping copyright law in 2019 that will require its member countries to adopt rules that would force tech giants to pay publishers. Google has threatened to pull Google News from the EU if member states comply.
Facebook has shown a willingness to create separate products that pay news publishers — including its News tab — but has balked at the notion of having to pay publishers broadly whenever news content is shared on their platform.
What they're saying:
- In a blog post Monday, Will Eason, Facebook's managing director for Australia and New Zealand, writes that the legislation "misunderstands the dynamics of the internet and will do damage to the very news organizations the government is trying to protect."
- The News Media Alliance, meanwhile, said Facebook's threat is "simply an attempt to bully the Australian government" and says Facebook's misinformation problem would be made worse without professional journalism. "They should view news as an answer and not a problem," the group said in a statement.
What's next: In this game of chicken, it remains to be seen whether either Facebook or Australia blinks. If neither does, democracy could be the ultimate victim.