Facebook under focus in Australia after refusing talks with publisher

SYDNEY • Australia's competition watchdog is looking into a claim that Facebook refused a publisher's request to negotiate a licensing deal, the regulator told Reuters, setting the stage for the first test of the world's toughest online content law.

The Conversation, which publishes current affairs commentary by academics, said it asked Facebook to begin talks under new laws that require the social media firm and Alphabet's Google to negotiate content-supply deals with media outlets.

Facebook declined without giving a reason, The Conversation said, even though the publisher was among the first in Australia to secure a similar deal with Google in the lead-up to the law last year.

The knock-back could present the first test of a controversial mechanism unique to Australia's effort to claw back advertising dollars from Google and Facebook: If the companies refuse to negotiate licence fees with publishers, a government-appointed arbitrator may step in.

In a statement responding to Reuters' questions, Facebook's head of news partnerships for Australia, Mr Andrew Hunter, said the company was "focused on concluding commercial deals with a range of Australian publishers".

Mr Hunter did not answer specific questions concerning The Conversation, but said Facebook was planning a separate initiative "to support regional, rural and digital Australian newsrooms and public-interest journalism in the coming months".

"If Google's done a deal with them, I can't see how Facebook should argue that they shouldn't," Mr Rod Sims, the chair of the Australian Competition and Consumer Commission (ACCC), said in an interview. "The question of designation might need to come into play," he noted, using the term for assigning an arbitrator.

Under the law, the decision to designate a Big Tech firm for intervention is made by the treasurer, who is advised by the ACCC, noted Mr Sims, but "an absolute 'no' for an organisation that should be getting a deal is something we'll look into". He did not give details.

The Conversation was "exactly what we had in mind with the Code", Mr Sims added, although the situation had some way to play out before any further action would be taken.

Governments around the world are introducing laws to make tech giants compensate media companies for the links that drive readers - and advertising revenue - to their platforms.

But Australia is the only country where the government may set the fees if negotiations fail, a factor that drove Facebook to block newsfeeds in the country just before the law was passed.

REUTERS