Facebook Exec Defends Australia News Blackout as ‘Legally Necessary,’ Claims It Will Pay at Least $1B to News Companies Over Three Years

Facebook’s top policy exec said the temporary ban of sharing news links in Australia was a difficult but “legally necessary” step for the social giant to protect itself. And, doing some damage control, the company has pledged to invest at least $1 billion over the next three years in paying news media companies.

The comments by Nick Clegg, Facebook’s VP of global affairs, come after Facebook on Tuesday said it will restore the ability for users and publishers in Australia to share news on its platform following the government’s agreement to make certain revisions to a law that requires internet companies to pay news providers.

Clegg, in a blog post Wednesday, admitted that in carrying out the news ban in Australia, Facebook “erred on the side of over-enforcement” and that as a result, “some content was blocked inadvertently.”

At this point, “We look forward to agreeing to new deals with publishers and enabling Australians to share news links once again,” Clegg wrote.

Clegg, a former U.K. deputy prime minister who joined Facebook in 2018, said that the company had faced two choices with the looming adoption of the Australian government’s news media bargaining code: Either “provide open ended subsidies to multinational media conglomerates” or remove news from our platform in Australia.

“We understand the decision to stop the sharing of news in Australia appeared to come out of nowhere,” Clegg wrote. However, he continued, “Far from being out of the blue, Facebook indicated that it might be forced into this position six months ago. We’ve been in discussions with the Australian government for three years trying to explain why this proposed law, unamended, was unworkable.”

Clegg compared the proposed Australian law to “forcing car makers to fund radio stations because people might listen to them in the car — and letting the stations set the price.”

After negotiations with Australian officials — talks that included CEO Mark Zuckerberg — policymakers in the country agreed to changes that satisfied Facebook. In a nutshell: Zuckerberg & Co. feel comfortable that they won’t be forced to pay “state-sponsored price setting,” as Clegg described it.

Facebook is now more closely hewing to the Google playbook, and promising paychecks to news orgs. Google last year pledged to pay $1 billion over three years to partners for content in the Google News Showcase. With regard to the Australia situation, Google moved to cut deals with news outlets in Australia, including with News Corp, in contrast to Facebook’s proactive news ban.

Also in Clegg’s blog post (titled “The Real Story of What Happened With News on Facebook in Australia”), the exec repeated Facebook’s position that the Australian law was based on the wrong-headed notion that Facebook somehow “steals” news. He also noted that news makes up less than 4% of users’ News Feed content — the implication being that Facebook doesn’t generate a ton of money by linking to news articles — and reiterated that publishers are the far bigger beneficiaries of their content being linked to from Facebook.

That said, Facebook — like Google — is fully willing to pay for news content, according to Clegg. Of course, that’s fait accompli Down Under, given that the requirement for internet platforms to compensate news-media companies is becoming the law of the land in Australia.

“We absolutely recognize quality journalism is at the heart of how open societies function — informing and empowering citizens and holding the powerful to account,” Clegg said.

Since 2018, Facebook has paid $600 million “to support the news industry,” and over the next three years plans to pony up at least $1 billion more, according to Clegg. In January, Facebook announced deals with U.K. media orgs including the Guardian, Telegraph Media Group, Financial Times, Daily Mail Group and Sky News, and it also has an agreement with News Corp. More paid-content deals are coming, Clegg wrote.

“There are legitimate concerns to be addressed about the size and power of tech companies, just as there are serious issues about the disruption the internet has caused to the news industry,” Clegg wrote. “But a new settlement needs to be based on the facts of how value is derived from news online, not an upside-down portrayal of how news and information flows on the internet.”

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