Facebook would only hurt itself by banning news, ACCC warns

News outlets including Buzzfeed “would still have journalists in Australia” if Google and Facebook had reached an agreement to pay for the news they used on their platforms, according to the head of Australia’s competition watchdog.

Australian Competition and Consumer Commission chairman Rod Sims warned Facebook would disadvantage its own users if it followed through on a threat to remove all news from their social networks in Australia, and said Google had misled users about the changes proposed by the new media law.

Mr Sims made the comments in a seminar held by the Australia Institute today, following weeks of protests from the powerful, multibillion-dollar American companies.

Google this week issued a set of three demands to change the news media bargaining code being drafted by the ACCC, while Facebook this month threatened to stop any publisher or user “sharing local and international news on Facebook and Instagram” if the law was introduced.

The news code, which would follow an 18-month ACCC inquiry into digital platforms, was designed to force Facebook and Google to share some of the revenue they received from using news stories created by Australian media organisations on their platforms.

But Mr Sims said some information shared about the draft laws by tech giants had been misleading, and the code was simply designed to ensure Australia would have a functioning fourth estate, which was “fundamental to democracy”.

He said claims the news code would give media organisations access to Google and Facebook’s algorithms were incorrect.

Mr Sims said introducing “final offer arbitration” if negotiations over payments stalled was a way to ensure the process would not attract “ambit claims” from either side, and would not be drawn out at the expense of smaller publishers.

Australian news outlets had already closed down while waiting for a news code to be introduced, he said.

“This is about helping news media businesses survive and prosper,” Mr Sims said.

“My view would be that if this code was in place, Buzzfeed would still have journalists in Australia. That’s my view and it’s informed by a few discussions I’ve had.”

Mr Sims said Google’s widespread warnings against the news code, including claims its free services and the incomes of YouTube creators were “at risk,” had caused unfounded fears among some in the tech industry.

Despite these claims, he said, the draft law would not require Google and Facebook to share “data from individuals that they collect” and would not give any media organisation access to the “back-end algorithms of the big social media companies”.

Mr Sims also refuted tweets from Atlassian co-founder Mike Cannon-Brookes that the proposal was akin to asking Netflix to pay for “lower popcorn revenues at movie theatres”.

“Google and Facebook are not replacing (news) — that’s the misunderstanding that people like Mike Cannon-Brookes have,” Mr Sims said.

“Where’s the journalism going to come from? Where’s the media going to come from? That’s what we’re trying to help here.

“Yes, Google and Facebook have come up with a fantastic, really clever business model … but they’re not providing media, they’re not providing news, they don’t employ journalists, they’re not replacing the news media business.”

Mr Sims said he did not know whether Facebook would follow through on its threat to remove all Australian and international news articles from its platform, but this action would ultimately “weaken Facebook” and disadvantage millions of Australians users who looked for news on their network.

“I think it would be a shame for Australian democracy, it would be a shame for Facebook users if they chose that course of action,” he said.

“If it becomes known that you can never get news media on Facebook, what does that do to Facebook’s standing? Will people go elsewhere? I think it will also weaken Facebook.”

Submissions on the news media code closed on August 28, and Mr Sims said the ACCC was now working through “a lot of input” to make recommendations to Treasurer Josh Frydenberg in early October.

The Government could introduce a news media bargaining code bill to parliament in late October.

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