The dispute between Australia and Facebook dates to when the Australian Competition and Consumer Commission, the country’s top competition authority, began drafting a bill last year. Australian officials have said the bill’s main goal was to create the conditions for deals between platforms and publishers, which have been at odds for years over the value of journalism and whether either side should be paid by the other.
Google and Facebook, which have been accustomed to largely not paying for news content, both balked at the proposed legislation. In August, Facebook said it would block users and news organizations in Australia from sharing local and international news stories on its social network and Instagram if the bill were to move forward. Last month, Google also threatened to make its search engine unavailable in Australia if the government approved the legislation.
But in recent weeks, Google began striking deals with media companies such as Reuters, The Financial Times and Rupert Murdoch’s News Corp.
Facebook, by contrast, held firm against the proposed legislation. That was because the code contained terms such as “final arbitration,” which would give an independent arbiter the power to set the price for news content if a publisher and the digital platform could not agree on a payment.
Facebook has repeatedly argued that the law gets the value proposition backward because it has said it is the one that provides value to news publishers by sending traffic to media websites, which can then be monetized with advertising.
But supporters of the law have said that final arbitration — which is used for contract disputes between players and Major League Baseball in the United States — provides needed leverage when one side is powerful enough to otherwise avoid negotiation if it chooses.
“The key is, and remains, the mandatory arbitration clause,” said Johan Lidberg, a media professor at Monash University in Melbourne, Australia. “That has to be maintained; without it the code would be toothless.”