Global social media giant Facebook is reported to have slammed a reconciliation bid by Australia's publishers while turning down requests to negotiate a licensing deal, setting the stage for the first test of the world's toughest online content law.
The Australian competition watchdog is already looking into a claim that Facebook Inc refused to adhere to an amicable solution.
According to The Conversation, which publishes current affairs commentary by academics, said it asked Facebook to begin talks as required under new Australian legislation that requires the social media firm and Alphabet Inc's Google to negotiate content-supply deals with media outlets.
The offer was later rejected by Facebook without giving any reason. The Conversation said this has come even though the publisher was among the first in Australia to secure a similar deal with Google in the lead-up to the law in 2020.
The knockback could present the first test of a controversial mechanism unique to Australia's effort to claw back advertising dollars from Google and Facebook: if they refuse to negotiate licence fees with publishers, a government-appointed arbitrator may step in.
“If Google's done a deal with them, I can't see how Facebook should argue that they shouldn't,” Rod Sims, the chair of the Australian Competition and Consumer Commission (ACCC), said in an interview. “The question of designation might need to come into play,” he noted, using the term for assigning an arbitrator.
Under the new law, the decision to designate a Big Tech firm for intervention was made by the treasurer, which is advised by the ACCC, noted Sims, but “an absolute ‘no' for an organisation that should be getting a deal is something we'll look into.” The Conversation was “exactly what we had in mind with the Code,” he said.
This comes at a time when governments across the globe are bringing stiff legislation to make the tech giants compensate media companies for the links that drive readers – and advertising revenue – to their platforms. But Australia is the only country where the government may set the fees if negotiations fail, a factor that drove Facebook to block news feeds in the country just before it was passed.
Meanwhile, some small and independent publishers whose content helps draw four-fifths of Australia's 25 million population to the Facebook site said the law had created a two-tier industry where rival titles that were owned by large parent companies secured deals while others missed out.
Nelson Yap, the publisher of Australian Property Journal, which is on a government register of media businesses covered by the law, said he was in early discussions with Google but had emailed Facebook twice with no response.