The Morrison government won’t bow to Facebook’s “heavy handed” attempts to block ground-breaking reforms of Big Tech platforms, Treasurer Josh Frydenberg said.

Responding to Facebook’s threats to ban all local and international news from its platforms if it doesn’t get its way in revenue-sharing negotiations, Mr Frydenberg said “Australia makes laws that advance our national interest. We don’t respond to coercion or heavy handed threats wherever they come from.”

Facebook has threatened to ban news content from its platforms if the government goes ahead with a madatory code of conduct that would force tech giants to share their revenue with the media companies whose content they republish.

The social media company said in a blog post the draft code, which came out of the ACCC’s efforts to curb the power of Big Tech, “misunderstood” the nature of content sharing on the internet, and would do “damage to the very news organisations the government is trying to protect”.

The ACCC maintains that there is a power imbalance between big, usually US-based platforms such as Google and Facebook, and the smaller Australian media companies whose news articles appear on those platforms.

In April, the Morrison government asked the ACCC to draft a code of conduct for Big Tech, and in May the ACCC proposed a “Mandatory News Media Bargaining Code” that sought to redress that imbalance by forcing Big Tech to pay for the content they use, or face hefty fines.

“Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram,” Will Easton, the managing director of Facebook in Australia & New Zealand said in the post. Facebook purchased Instagram for around $US1 billion in 2012.

“This is not our first choice – it is our last. But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”

In 2020 alone, Facebook had already sent an estimated $200 million worth of traffic to Australian news organisations, at no charge, Mr Easton said.

The social media giant proposed to the ACCC that it bring its Facebook News service to Australia, which would have given it the ability to pay media companies directly for the content appearing in that service, but that offer had been rebuffed by the ACCC, he said.

“Instead, we are left with a choice of either removing news entirely or accepting a system that lets publishers charge us for as much content as they want at a price with no clear limits. Unfortunately, no business can operate that way,” Mr Easton said.

In a statement, Treasurer Frydenberg defended the draft code.

“Our reforms to digital platforms are world leading and following a ground breaking 18 month inquiry by the ACCC.

“These reforms will help to create a more sustainable media landscape and see payment for original content,” he said.

Google, which would also be subject to the code, has also played hardball in its efforts to strengthen its bargaining position.

In August, it added warnings to YouTube and to its search page, threatening to “dramatically” degrade its Australian services if it was forced to share revenue with the media companies whose content it was republishing.

The consultation period for the draft code finished Friday. The ACCC has been contacted for comment.

This story originally appeared in the Australian Financial Review. Read the original story here.

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