Facebook agrees to restore news content in Australia, strikes first commercial deal with publisher

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This week’s developments in Australia could help lay the foundation for Canada

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A face-off between Facebook and the Australian government that prompted the social media giant to remove all news from its platform in that country has been resolved, with Facebook pledging to restore news “in the coming days” and striking its first major commercial deal with a media company there.

The developments came after talks over the past week and an agreement by the Australian government to make amendments to an incoming mandatory bargaining code designed to give news publishers equal bargaining power to negotiate payment for their content.

“We are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them,” William Easton, Facebook’s managing director for Australia and New Zealand said in a statement Tuesday.

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We need to find a solution that is sustainable for news publishers, small and large, digital platforms, and for the health of our democracy,

Canadian heritage minister Steven Guilbeault

Almost immediately, Australia’s Seven West Media announced it had signed a letter of intent to provide news content to Facebook, with details expected within a couple of months once a formal agreement is laid out.

The Canadian government is closely watching developments in Australia — as well as in Europe — as it plans to unveil legislation by June to level the playing field between digital platforms and traditional media players and support the domestic news industry.

In a statement Tuesday, Canadian heritage minister Steven Guilbeault commended the Australian government and Facebook for their commitment to finding a “lasting solution” for that country, and reiterated his government’s commitment to consult with international players, media companies and digital platforms to create a framework tailored to Canada.

“We need to find a solution that is sustainable for news publishers, small and large, digital platforms, and for the health of our democracy,” Guilbeault said.

Observers said this week’s developments in Australia could help lay the foundation.

John Hinds, chief executive of News Media Canada, said it marks “the first time Facebook has agreed to engage in good faith negotiations with publishers to provide remuneration,” and is therefore a positive step forward for all publishers and news content creators.

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“The goal has been to secure fair compensation for the use of publishers’ content and we are happy that Facebook is coming to the table,” he said.

Michael Geist, a law professor at the University of Ottawa and Canada Research Chair in internet and e-commerce law, said neither side can claim full victory in Australia, which suggests the outcome is a workable compromise.

“I think there are elements of face-saving (no pun intended) for both sides,” he said.

Facebook’s demonstration that it is prepared to pull news entirely from its platform “surely sparked discussions about a way to allow for the company to contribute through commercial licensing arrangements to the media sector without compromising on that position,” Geist said.

The Australian government, for its part, “was able to maintain its desire for support for the sector,” with a last resort of binding arbitration, if necessary.

Canada could similarly seek to establish a model based on commercial negotiations and licensing agreements, Geist said. This would follow a path being actively pursued by another tech platform, Google, which signed three major deals this month with publishers based in Australia.

“While the government has said it wants a made-in-Canada solution, this latest resolution is more likely what it really wants, namely commercial licensing arrangements that benefit both sides without the need to resort to legislation that could spark the kinds of content blocking we witnessed in the last week,” Geist said.

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Kevin Chan, global director and head of public policy at Facebook Canada, said Tuesday that the tech platform is “exploring investments in news licensing and programs to support the long-term sustainability of journalism.”

He added that options to support news in Canada are targeting publishers of all sizes, based on the value that the company’s platforms bring to news organizations.

“We want to collaborate with the news industry and government to get this right,” Chan said.

When Facebook pulled the plug on news in Australia last week — a move that angered some because many turned to the platform for important weather and health information during the pandemic — Easton said in a statement that “the value exchange between Facebook and publishers runs in favor of the publishers.”

Facebook generated about 5.1 billion “free referrals” to Australian publishers last year, he said, which the platform estimated was worth about AU$407 million.

“For Facebook, the business gain from news is minimal,’ Easton added, saying news makes up less than four per cent of content people see in their so-called “news feed.”

Geist said Facebook may have added incentive to negotiate acceptable commercial deals with news content providers outside a code such as Australia’s. The legislation in that country also contains a code of conduct and provisions that would require tech platforms to make disclosures about their algorithms and data, he said.

• Email: bshecter@postmedia.com | Twitter:

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

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