Australia's antitrust chief claims victory after Facebook standoff

CANBERRA (Reuters) – The architect of Australia’s laws forcing Google and Facebook to pay media companies for content claimed victory on Wednesday though critics said last-minute changes to appease Facebook favoured Big Tech over smaller news outlets.

After tense negotiations prompted Facebook to cut off news in the country last week, Australia offered a host of technical concessions and the social media giant said it would restore news as the revamped bill looked set to become law this week.

Even though Facebook said its concerns had been met and opposition lawmakers warned that smaller media players may be overlooked, Australian Competition and Consumer Commission Chair Rod Sims said the bargaining power imbalance had been righted.

“The changes the government’s done are things that either don’t matter much or are just to clarify things that, at least in Facebook’s mind, were unclear,” Sims, who helped draft the original laws, told Reuters.

“Whatever they say, they need news. It keeps people on their platform longer. They make more money,” he said.

The endorsement from Australia’s top antitrust regulator will bolster the government’s argument that its hardline approach worked and may offer encouragement to countries such as Canada and Britain which have said they plan similar laws.

Other countries have introduced legislation forcing so-called Big Tech players to negotiate with media companies for licencing fees for links that draw traffic, and advertising revenue, to their platforms.

However, Australia will be the first country where a government arbitrator effectively sets the rates tech giants will have to pay if negotiations with media companies fail.

The last-minute changes include an extra two-month mediation period between any failed talks and state intervention and give the government discretion to release Facebook from the process if it proves it has made a “significant contribution to the sustainability of the Australian news industry”.

Facebook’s vice president of global news partnerships, Campbell Brown, said in a blogpost that the changes confirmed the U.S. company could decide which news, if any, appeared on its platform and that it could avoid forced arbitration.

But Sims said Facebook was always free to stop offering news – and had also been free to cut deals to avoid intervention.

“This isn’t a must-carry regime,” he said. “We never said we’re forcing Facebook to keep showing news.”

SMALL MEDIA, BIG CONCERNS

While the Senate backed the changes before sending the amended bill back to the lower house, where it was expected to pass soon, opposition lawmakers and smaller media firms warned that giving the government power to spare tech giants its involvement could leave niche outlets without compensation.

“The big (media) players could successfully negotiate with Facebook or Google. The minister then doesn’t designate them, and all the little players miss out,” independent senator Rex Patrick, who opposed the amended legislation, told Reuters.

Lee O’Connor, owner and editor of regional newspaper The Coonamble Times, said the changes appeared to weaken safeguards for smaller players.

“It’s the vagueness of the language that’s the main concern, and the minister’s discretion is part of that,” O’Connor said.

Antitrust regulator Sims dismissed the concerns.

“If Google and Facebook don’t do deals with even the smaller players, my view is they’ll get designated (as subject to intervention),” he said.

If Google and Facebook did deals with all Australia’s major outlets, which account for up to 90% of the country’s media content, “why the hell would they muck it all up and not do the other 10%? It makes no sense,” Sims said.

DEAL DELUGE

After threatening to withdraw its search engine from Australia over the laws, Alphabet’s Google instead struck deals with most large Australian publishers, including a global arrangement with News Corp.

Television broadcaster and newspaper publisher Seven West Media became the first media company to announce a Facebook deal, saying late on Tuesday it had signed a letter of intent to reach a content supply agreement within 60 days.

Rival Nine Entertainment Co said on Wednesday it was now in talks with Facebook.

“We’re still obviously proceeding with negotiations,” Nine CEO Hugh Marks told analysts at a company briefing. “It is really positive for our business and positive particularly for the publishing business.”

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