Today, we want to share our response to Australia’s proposed News Media Bargaining laws, following our submission to the Senate Committee.
When the first draft of the legislation was announced, it included a one-sided regulatory proposal that ignored the value that our platform brings to news organisations. Unfortunately, the latest version still fails to acknowledge the commercial and technical realities of how publishers use Facebook and the value we provide to them. Ultimately the legislation does not provide solutions that will help the news industry over the long-term.
Our investments in the news industry
We continue to work on creating a sustainable path for the news industry. In the last two years, we’ve reached commercial agreements and launched funding programs with 30 Australian news organisations and hundreds more around the world. Last year, we hoped to increase our investment in Australia with the expansion of Facebook News, but could only do so with the right rules in place.
While the Australian Government continues to discuss these rules, we’ve prioritised other countries for investment until we understand the impact of this proposed law. Later this month, we’ll launch Facebook News with leading national and local news organisations in the UK before expanding to France and Germany later this year. This was achieved through open, good faith commercial deal-making that reflects the value offered by Facebook without the need for binding arbitration.
How news works on Facebook
Publishers choose to share their content on Facebook, and in return, receive free distribution and the ability to better understand, develop and grow readers on their own websites and apps. This in turn helps them sell more subscriptions and bring in more advertising revenue. In fact, between January and November last year, we sent 4.7 billion clicks from News Feed to Australian news websites at no charge – a value exchange worth an estimated A$394 million to Australian publishers.
We also enter into commercial agreements with publishers to pay for new content made available on Facebook, and build customised tools to help them effectively monetise across our services. Between January to November 2020, these tools delivered A$5.4 million to Australian publishers from revenue share programs, such as In-Stream Ads.
Our concerns with Australia’s approach
We outline several areas of the law that remain unworkable in our submission. Three leading issues, as currently written, are not parts of legislation we’d support in Australia, or any country:
- Mandating commercial arrangements with every single one of a large number of publishers regardless of the value they provide to the people who use our products
- A process that removes all autonomy to decide our commercial arrangements and uses binding arbitration to determine price over good-faith negotiations
- A non-differentiation clause that prevents us from offering commercial terms to certain publishers and changing how we display their content regardless of whether we agree a deal. This means that if one publisher is out, all Australian publishers need to be out.
Ultimately, the legislation still fails to address the original outcome it set out to achieve: to encourage genuine bargaining between news organisations and tech companies. Instead, it mandates that two digital platforms must enter into agreements with every eligible news organisation in Australia, regardless of the value we receive. It also prevents us from introducing new products unless we roll them out to everyone, which seriously inhibits our ability to bring Facebook News to Australia.
There’s no other law like this in Australia. No other business is forced into a highly uncertain binding arbitration process where the government decides who enters these agreements and forces payment from the provider of a free service. It also allows publishers to decide what they share on Facebook without setting any limits or caps on the volume of content we’re compelled to pay for.
In fact, the Australian Government itself estimates that at least 75 percent of bargaining processes will be forced to proceed to binding arbitration. This fails to achieve the original goal of encouraging genuine bargaining between both parties. Beyond that, it allows an estimated 100 to 200 broadly-defined eligible news organisations to make deals as individual mastheads and digital channels. This could expose Facebook to more than 1,000 standalone commercial arrangements depending on how publishers use our service.
The road ahead
Due to the complexities of this law, more work is needed to incentivise open commercial negotiations rather than an untested and unpredictable arbitration approach.
We believe that deals reflecting genuine commercial value from both publishers and Facebook can still be reached before applying serious penalties under the law. We urge the government to address the unworkable components of this law.
With the right rules in place, we will invest more money and expand our tools and programs to help news businesses adapt to the changing digital landscape and ensure our community sees news that is relevant and meaningful to them. Over the next three years, we will continue to support the global news ecosystem by investing hundreds of millions of dollars to expand the roll out of Facebook News, and launch new accelerator programs and subscription revenue products. We hope with changes to this legislation Australia will be part of this expansion.
We’ll continue to work with the Australian Government and Senate Committee to advocate for smart regulation that enables innovation and collaboration between digital platforms and news organisations..