Facebook has threatened to cut off Australian publishers and users from sharing local and international news on its platform and Instagram.
The social media behemoth wrote to the NZ Herald today that it will "reluctantly withdraw the ability for publishers and people in Australia to distribute news on Facebook and Instagram" in response to proposed legislation.
The Australian Government wants to introduce a law which aims to have Facebook and fellow internet giant Google financially compensate publishers for the content and value they provide to the global platforms.
Google has also raised issue with the Australian Government's proposal, saying it would see a "dramatically worse" search engine and YouTube (Google-owned) product provided to consumers Downunder.
In Facebook's email to the Herald, representative Andrew Hunter said the potential law has "many serious flaws" and misunderstands the relationship between the news media and social media.
"Assuming this proposed legislation becomes law, we will reluctantly withdraw the ability for publishers and people in Australia to distribute news on Facebook and Instagram. This is not our first choice - it is our last. We would support regulation that truly served the long-term interests of Australian consumers," he said.
In a statement also posted online yesterday, Will Easton, the managing director for Facebook Australia & New Zealand, said the proposed regulation misunderstood "the dynamics of the internet and will do damage to the very news organisations the government is trying to protect".
Easton said stopping Australians from sharing news articles "is the only way" to protect itself against an outcome that "defies logic and will hurt, not help" the long-term vibrancy of Australia's news and media sector.
Despite this, he said Facebook shares the Australian Government's goal of supporting news organisations, particularly local newspapers.
"But its solution is counterproductive to that goal. The proposed law is unprecedented in its reach and seeks to regulate every aspect of how tech companies do business with news publishers."
Easton added it was "most perplexing" that the law would "force" Facebook to pay news organisations for content which publishers voluntarily upload to its platforms.
He said it would also be at a "price that ignores the financial value we bring publishers".
"The [Australian Competition and Consumer Commission] presumes that Facebook benefits most in its relationship with publishers, when in fact the reverse is true. News represents a fraction of what people see in their News Feed and is not a significant source of revenue for us."
Easton said during the first five months of 2020 the US company "sent 2.3 billion clicks from Facebook's News Feed back to Australian news websites" at no charge.
This additional traffic was worth about A$200 million to Australian publishers, he said.
Despite the threat to prohibit Australians from sharing news, Easton said Facebook still recognises news "provides a vitally important role in society and democracy".
"We had also hoped to bring Facebook News to Australia, a feature on our platform exclusively for news, where we pay publishers for their content."
Last October Facebook introduced a separate news section in the US, which pays some publishers for the content, and has plans to expand the function to other parts of the world.
"But these proposals were overlooked," Easton 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."
Facebook products and services in Australia which allow family and friends to connect will not be impacted by its decision, Easton said.
"Our global commitment to quality news around the world will not change either. And we will continue to work with governments and regulators who rightly hold our feet to the fire," he added.
"But successful regulation, like the best journalism, will be grounded in and built on facts. In this instance, it is not."
Those comments come as Facebook faces heavy criticism around the world for allowing the spread of Covid-19 conspiracy theories, hate speech, and fake news and political discourse.
The company and its CEO Mark Zuckerberg were heavily criticised in New Zealand after the company allowed last year's Christchurch terror attack to be choreographed for Facebook Live.
It has also shrugged off criticism from regulators and privacy experts this year, while more than 500 companies launched an advertising boycott intended to pressure Facebook into taking a stronger stand against hate speech.
New Zealand media company Stuff was one local firm which dropped its use of Facebook and Instagram in a continuing trial this year.