Facebook on Wednesday said it would restrict publishers and people in Australia from sharing or viewing Australian and international news content in response to a new law requiring tech platforms to reimburse news publishers.
Why it matters: The move sets a precedent for how Facebook may handle other global efforts to force it to pay news publishers for their content.
Details: The tech giant says that the changes affecting news content “will not otherwise change Facebook’s products and services in Australia,” and specifically points to Facebook’s Groups feature as one that it hopes users in Australia specifically continue to use.
- The move will also affect users outside of Australia, according to Facebook’s announcement: “Globally, posting and sharing news links from Australian publishers is also restricted.”
Catch up quick: Australian lawmakers have said they would avoid passing a new law if Google and Facebook reached payment terms with Australian news publishers on their own.
- The law would have forced Google and Facebook specifically to pay publishers on terms set by third-parties if they were unable to reach agreements themselves.
- Facebook’s managing director of Facebook Australia & New Zealand William Easton said in a statement Wednesday that the law “fundamentally misunderstands the relationship between our platform and publishers who use it to share news content.”
- “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.”
The move comes hours after rival Google, which was also subject to the same law, announced it struck a multi-year agreement with News Corp, the largest owner of newspapers by circulation in Australia, to pay for its content.
- Over the past week leading up to the law’s passage, Google has struck deals with several Australian publishers, including Nine Entertainment, Junkee Media and Seven West Media.
Be smart: Facebook is taking the opposite approach from Google because it has less to lose than Google, due to the nature of its product.
- Restricting people from sharing articles on its News Feed cuts into Facebook’s business far less than Google would be affected if it had to stop Australians from using its search engine, the primary vehicle for sharing links on its platform.
- “For Facebook, the business gain from news is minimal,” Easton writes. “News makes up less than 4 percent of the content people see in their News Feed.”
- “Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content,” Easton said. “On the other hand, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue.”
The big picture: Other countries around the world are also considering laws that would force tech giants to pay for news. These types of threats have forced tech giants to create new features that steer money to news outlets without having to totally reimagine their businesses.
- Facebook has spent millions of dollars paying publishers to be a part of its Facebook News tab. Facebook News launched last week in the U.K.
- Facebook says it was prepared to launch Facebook News in Australia “and significantly increase our investments” with local publishers, but was only prepared to do that “with the right rules in place.”
- Google said last fall it would pay publishers $1 billion for their content to appear in Google News Showcase.