Facebook Cuts Off News in Australia in Fight Over Payments

Facebook Inc. has started restricting the sharing of news on its service in Australia, defying a controversial proposed law that would require technology companies to pay publishers when their articles are posted by users.

The ban constitutes the strongest action yet in response to the proposed legislation, which would force Facebook and Alphabet Inc.’s Google to pay publishers for the value their articles generate on the digital platforms. News outlets have demanded such payments, arguing they should be fairly compensated for their journalism as Google and Facebook capture much of the advertising market.

Facebook’s decision blocks those in Australia from sharing news stories and stops users globally from sharing articles from Australian publishers. It threatens to cut off one of the most widely used ways for millions to access information online. Users also reported a number of non-news websites -- including government platforms for coronavirus information and weather warnings and satirical pages -- appeared to be inaccessible Thursday. Facebook said in a statement its actions shouldn’t have affected those sites, but that it would restore pages that may have been “‘inadvertently impacted.”

The potential fallout from the spat goes far beyond Australia for Facebook and Google, whose dominance of global advertising has made it a target for watchdogs worldwide. Australia’s envisioned law could set a precedent with other countries that have watched the two internet giants impact their news industries. While they oppose the measure in Australia, Google and Facebook have struck separate, voluntary agreements to pay publishers. Earlier Wednesday, Rupert Murdoch’s News Corp. -- a supporter of the Australian proposal -- said it had reached a deal with Google for the search giant to pay for journalism from the Wall Street Journal and its other newspapers.

Canberra warned Facebook it was only damaging its own image. “Facebook needs to think very carefully about what this means for its reputation and standing,” Communications Minister Paul Fletcher said on an Australian Broadcasting Corporation interview Thursday morning. “On quiet, sober reflection, they will start to become quite troubled about what that would mean for how that platform is received.”

Josh Frydenberg, Australia’s Treasurer, tweeted that he had a “constructive discussion” with Facebook Chief Executive Officer Mark Zuckerberg on Thursday morning Australia time. “He raised a few remaining issues with the Government’s news media bargaining code and we agreed to continue our conversation to try to find a pathway forward,” he wrote. A Facebook representative said Zuckerberg again voiced his disappointment during the conversation over the proposed law, but affirmed the company will continue to engage.

Last summer, Facebook had threatened to block people and publishers in Australia from sharing news on its main social network and Instagram if the legislation were to become law. Google has similarly threatened to shut its search engine in Australia.

On Wednesday, Facebook tried to draw a contrast with Google, arguing that publishers don’t voluntarily provide articles that appear in Google search results, while they willingly post news on Facebook, which helps them reach a larger audience.

The Australian proposal penalizes Facebook “for content it didn’t take or ask for,” William Easton, managing director for Facebook in Australia and New Zealand, said Wednesday in a blog post.

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” he said. “It has left us facing a stark choice: Attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter.”

Publishers already reap tangible benefits from links on Facebook, Easton said. Last year, Facebook generated about 5.1 billion free referrals to Australian publishers, worth an estimated A$407 million ($315 million), he said, without providing a basis for the calculation.

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