Facebook threatens news block if Australia brings in pay-for-content law

Facebook has threatened to stop Australians sharing news on its platform. Photo / AP

Facebook said that it will block Australians from sharing local and international news if the country passes a law requiring the company to pay publishers for their content.

The shock decision to pull news off the platform came on Monday, the final day of a consultation period for a new law that would force Facebook and Google to give Australian news organisations a cut of its advertising revenues.

The law, a radical approach to compensating struggling news organisations who say they have lost advertising revenue to social media and search engines, could see the companies paying bills totalling hundreds of millions of dollars by the end of the year.

Will Easton, head of Facebook Australia and New Zealand, said the company had been "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" adding that "no business can operate that way".

Led by the Australian Competition and Consumer Commission, the regulation will force Facebook and Google to come to an agreement with news organisations to share royalties for the content even if it is voluntarily placed on the platforms.

Easton claimed that news represented just a "fraction" of what people see in their News Feed and was "not a significant source of revenue for us" and that the benefits the media enjoyed from exposure on social media outweighed loss of advertising revenue.

The Australian government would "do more damage to the very news organisation the government is trying to protect", he said, claiming that it had "ignored important facts, most critically the relationship between the news media and social media and which one benefits most from the other".

Three months

Under the new law, Facebook could be forced to share data such as the ranking of a news story on its feed to work out the revenues generated from news stories. It may have to warn the media in advance of any changes to algorithms that would affect the visibility of stories.

The law will initially just apply to Google and Facebook although could be broadened out to other digital firms in future.

They will have three months to come to an agreement with news organisations over how much to pay.

If Facebook and Google are found to be breaking the law they face fines of up to A$10 million ($10.9m) per breach or 10 per cent of annual local turnover, depending on which is larger.

- Telegraph Group Ltd