Out With the Old, In With The New(s)? Not for Facebook Australia

Out With the Old, In With The New(s)? Not for Facebook Australia​

The Story

A proposed regulation in Australia would force Big Tech to pay news publishers for linking articles across their platforms (The New York Times). In response, Facebook has announced it will restrict those in Australia from sharing news articles, and ban the sharing of articles that originate from Australia (The New York Times; CNN). The legislation includes a code of conduct permitting media companies to negotiate payment of their news content (The New York Times). This represents the culmination of a long struggle between big tech companies and media firms, with the latter having spent years petitioning for fair compensation for their articles (CNN).

Managing director of Facebook Australia and New Zealand William Easton stated that the law, “fundamentally misunderstands the relationship between our platform and publishers who use it to share news content” (The New York Times). Facebook claims publishers profit from sharing news articles on their platform (WSJ). The tech company has recently launched Facebook News, a curated news section allowing payments to be made to content creators (The Economist). However, with the announcement of the new law, Facebook is seeking to invest and launch this feature in other countries (The New York Times).

Google, on the other hand, has responded to this proposed legislation by closing a three-year deal with News Corp, paying the media company to publish its content on the platform (The Economist). It has announced similar deals with Seven West Media and Nine Entertainment (CNN). This is likely because the news-sharing function is central to the search engine, whereas for Facebook, it only represents a small portion of global revenues (The Economist).

What It Means For Businesses And Law Firms

The world is watching. Regulators in many states are exploring ways to restrict the influence of big tech, and are considering implementing a similar law (CNN). However, such a law would drastically alter the way deals are struck between tech companies and media firms. Following Australia’s proposed legislation, the code of conduct would only apply to registered media companies approved as legitimate, allowing the government to oversee commercial deals (The New York Times). Easton describes this as setting a precedent where “the government decides who enters into these news content agreements, and ultimately, how much the party that already receives value from the free service gets paid” (CNN). Essentially, it boils down to questions of how much government intervention is appropriate and addressing “bargaining power imbalances” (The New York Times).

In light of this new legislation, law firms will be involved in crafting licensing deals between big tech companies and media firms. For the latter, law firms may represent them as a collective or an individual. Smaller media businesses impacted by this new legislation may seek advice from solicitors to better understand how to navigate the new regulatory landscape. If other countries follow suit, antitrust and competition lawyers will play a key role in advising big tech companies how to move forward, to recognise and anticipate these new legislative changes.

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