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Facebook returns to the negotiating table one day after news ban in Australia

Facebook logo. Photo by Reuters/Regis Duvignau. Sketched by the Pan Pacific Agency.

CANBERRA, Feb 21, 2021, SMH. Facebook tried to restart talks with major news outlets Nine Entertainment Co and News Corp Australia about payment for use of their content after implementing a nationwide news ban, but is still refusing to remove key provisions that allow it to terminate the deals if the news media bargaining code becomes law, The Sydney Morning Herald reported.

The social media platform shocked local users on Thursday when it blocked news articles on its platform and accidentally wiped the pages of government departments, charities and health pages.

Facebook founder Mark Zuckerberg was directly involved in carrying out the news blocking exercise in a fierce stance against a proposed code that could become law by the end of the week, which would force it into commercial negotiations with news outlets or face large fines.

Multiple industry sources familiar with Facebook’s talks, who spoke on the condition of anonymity, said just a day after the unprecedented move Facebook contacted News Corp and Nine (owner of this masthead) to reengage about commercial deals. Both parties were in talks with Facebook almost two weeks ago but the conversations stopped before Facebook made an eleventh-hour decision to pull all Australian news content.

Since Facebook’s last attempt to engage on commercial deals, Google has agreed to multi-million dollar deals with News Corp, Nine, Seven West Media and Guardian Australia and smaller outlets such as youth website Junkee. The ABC remains in talks with Google and Communications Minister Paul Fletcher said on Thursday that any proceeds the broadcaster receives will not ”lead to a reduction in the funding” that the government provides.

It is unlikely a deal with Nine or News Corp will be struck with Facebook because it still has not removed a “poison pill” clause allowing it to terminate any deals it struck with publishers upon the passage of the new laws. The sources said the offers put back on the table had no significant changes to the ones previously rejected for the termination provisions.

Google had initially inserted a similar clause into its agreements but dropped it after amendments were made to the proposed law. Facebook declined to comment on the renewed talks. News Corp and Nine were approached for comment.

Treasurer Josh Frydenberg told The Sun Herald and The Sunday Age he had held “constructive” discussions with Mr Zuckerberg over the weekend but he has no intention of walking away from its media laws that would compel tech platforms such as Google and Facebook to pay media companies for using their content.

The Senate is expected to debate the new laws on Monday, but there are concerns that if it is not passed by the end of the week it may not be legislated before the middle of the year.

Facebook’s decision to turn off news in Australia sent shockwaves through the broader media industry and government.

Federal Health Minister Greg Hunt said there would be no paid advertising in the immediate future on Facebook promoting the vaccine roll out or other health services.

“I spoke to my office to make sure on Thursday that we were not doing that. I will check that my department is not but on my watch, until this issue is resolved, there will not be Facebook advertising,” Mr Hunt said on the ABC’s Insiders program. “I will reaffirm that with the secretary today but we’ve already done that with my office and I reaffirmed yesterday that there has been none commissioned or instituted since this dispute arose. I’ve got to say basically you have corporate titans acting as sovereign bullies and they won’t get away with it.“

Prime Minister Scott Morrison said his government would be using “all the communication mechanisms” available to it, including Facebook, to promote its COVID-19 vaccine rollout.

Mr Hunt then clarified there would not be any paid advertising through the platform.

There are three issues that Facebook currently takes issue with in the code – a provision that prevents Facebook from discriminating between different news outlets that ask for money, a “baseball” or “final offer” arbitration mechanism that allows an independent body to select one payment over another, and the obligation to enter commercial negotiations. Unlike Facebook, media companies are supportive of the code and are urging for it to be legislated immediately.

Facebook’s vice president of public policy Simon Milner declined to comment on the alternative proposals the company had put forward to the government on Friday but said news could eventually return to the platform.

“On the issue of is this permanent, it really does depend on what law comes finally into effect. Once it goes through the Senate, our understanding was that the government had made its final amendments,” Mr Milner said.

“If the law continues to make it un-viable for us to have news on Facebook, there’s no basis on which we can change this. If the law were to change then that creates opportunities for us to feel confident about being able to have news on the service without being unfairly penalised by this law.”

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