The Australian government has drafted legislation to force the US tech giant and Google to compensate publishers for the value their stories generate for the platforms. Facebook lobbed a grenade on Sept 1 seeking to hollow out the proposed law. If it passes, the company will block Australians and publishers from sharing news on Facebook and Instagram, an unprecedented step.
“This is a microcosm for other markets and what may happen as Facebook defends its turf,” said Dan Ives, an analyst at Wedbush Securities in New York. The company has come out “throwing punches”, he said. The draft Australian law, which needs approval in parliament, calls for an arbitration panel to decide how much Facebook and Alphabet Inc’s Google must pay publishers if the two sides can’t agree.By pushing back in Australia, Facebook is telling other European regulators what to expect in disputes over the platform’s use of news, said Rob Nicholls, an associate professor at the business school of the University of New South Wales in Sydney.
The chairman of Australia’s competition watchdog, Rod Sims, said in an interview in July that he knows of several counterparts overseas who are considering taking similar steps to Australia’s. Facebook’s explosive intervention follows recent gains by publishers in Europe against digital platforms.