Metamorphosis: Changes for Facebook in Australia
As Meta prepares for a major upheaval down under, its withdrawal of Facebook News raises questions for publishers and copyright owners, explain Luke Dale and Chris Power from HWL Ebsworth Lawyers.
In a notable development, Meta Platforms, the company behind Facebook, declared in February its intention to phase out Facebook News in both Australia and the US.
Meta's news content agreements
The move comes after Meta entered into contractual arrangements with numerous Australian news entities in 2021, in response to the enactment of the News Media and Digital Platforms Mandatory Bargaining Code (the Code). Instituted by Australian lawmakers, the Code aimed to rectify imbalances in bargaining power—requiring digital platforms to compensate Australian news entities for the use of their content.
Under the Code, Meta committed to 13 separate commercial agreements with news entities, providing a critical component in the Australian news financial ecosystem and its digital expansion. However, with many of these agreements set to end in April 2024, Meta has decided to let these deals expire, opting to withdraw from news content. Meta justifies this decision citing that news stories constitute less than 3% of content in the global Facebook feed.
Impact on Australian news
The practice of aggregating credible news content by Meta has played a pivotal role, enabling Australians to access essential news efficiently. Meta's assertion that news content represents 3% of the Facebook feed belies the significant value that such content delivers in terms of relevance and the capacity to inform the platform's users.
The discontinuation of news aggregation is set to profoundly affect the visibility of critical news, particularly for rural and regional publications. This situation underscores a crucial challenge regarding Meta's role in sustaining the viability of Australian news publishers. Absent compensation for the use of news content, the entire industry faces the prospect of withdrawing operations and reducing national coverage. This highlights a significant concern in the ongoing dialogue on digital platform regulation and the equitable distribution of revenues derived from journalistic content.
Regulatory intervention
The Australian government may consider enforcing the Code in response to Meta's withdrawal from news content. Entities such as the Public Interest Publishers Alliance, representing 24 news outlets, and the executive chairman of News Corp Australia, have urged the government to employ the Code as a remedial action.
The Code encourages digital platforms and news entities to negotiate commercial agreements independently. Failing this, it outlines a structured process for negotiation, mediation, and, if necessary, arbitration to determine appropriate compensation from digital platforms. Despite this framework, neither Google nor Meta has been formally designated under the Code.
Meta's withdrawal could lead to arguments that its platform, devoid of dedicated news content, falls outside the Code's purview. This perspective, however, overlooks that Facebook will continue to serve as a medium whereby users access news content directly from publishers, albeit not through a dedicated news feed tab. Previous attempts to compel Meta to remunerate news publishers— including Meta's temporary Australian news block in 2021 and its subsequent news blackout on Facebook and Instagram in Canada— illustrate the challenges inherent in mandating such negotiations.
Copyright considerations
Meta's retraction from news content raises questions concerning copyright infringement, particularly the re-posting of news headlines by users without compensation. Notably, the act of users independently republishing news headlines—facilitating access to the original articles—does not infringe upon the copyright of news publishers. This stance is supported by the decision in Fairfax Media Publications v Reed International Books Australia (2010), which held that headlines, akin to book titles, are generally deemed too brief and insubstantial to warrant copyright protection as literary works. This precedent underscores that headlines serve primarily as article identifiers and concise subject summaries, lacking the substantive content typical of copyrighted literary works.
Additionally, the case of Universal Music Australia v Cooper (2006) clarifies the parameters of secondary infringement. The court determined that the act of linking to copyrighted material, similar to users sharing news article links on Facebook, does not constitute copyright infringement by the platform or its users. Accordingly, the sharing of news article links by users does not breach copyright, nor does it imply authorisation of infringement by Facebook, as these links direct users to the original news sites rather than unauthorised copies. However, the presence of scams and misinformation on Facebook has drawn significant criticism for privacy violations and concerns regarding eSafety within Australia.
Meta's past and present
Meta's legacy is marred by significant breaches of user privacy, alongside instances of proliferating misinformation and harmful content. Notably, the Federal Court levied a $20 million AUD ($13 million) fine against Meta for harvesting user data via its VPN app Onavo. Concurrently, Australia's privacy watchdog pursued legal action against Meta in the Federal Court for unauthorised dissemination of personal data to Cambridge Analytica used for political purposes. These privacy violations have exacerbated the spread of misinformation, affecting political discourse and public health awareness. To mitigate these issues, the Australian government has empowered the eSafety commissioner to mandate disclosures from corporations such asMeta regarding their strategies to curb harmful content. Although existing regulations compel technology companies to document and report instances of harmful content, there are few penalties for platforming misinformation, an issue that may become more prevalent with the absence of a trusted news feed.
Meta's tax practices have also come under scrutiny, particularly in the context of its profit reporting and tax liabilities in Australia. Despite Meta's significant turnover of $1.4 billion AUD, Facebook Australia's tax payment was notably modest at $42 million AUD, largely attributed to revenue routing through Irish subsidiaries to capitalise on lower tax rates. This financial manoeuvring, juxtaposed with Meta's influential role in the digital and news ecosystems, raises critical questions about its obligations to fairly compensate news publishers, especially in light of its decision to cease news content agreements.
The current situation emphasises the broader implications of Meta's operational and fiscal strategies on the Australian media landscape and regulatory environment. With Meta now at a crossroads, important consideration must be given to the sustainability of news publishing, and the impact that digital platforms hold on the broader informational ecosystem in Australia.
Luke Dale is a partner at HWL Ebsworth Lawyers.
Chris Power is a graduate lawyer at HWL Ebsworth Lawyers.
