Facebook blocks news content in Australia as it blasts proposed law

New legislation will mean Facebook and Google have to pay news publishers for content

FILE PHOTO: Facebook Founder and CEO Mark Zuckerberg speaks on stage during the annual Facebook F8 developers conference in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam/File Photo

Facebook has blocked news reports from its feed in Australia, drawing a line against a proposed law that would require it and Google to pay news publishers for content.

Starting on Wednesday, Australian users are not able to read or share news content on Facebook feeds, and Australian publishers are restricted from posting or sharing content on Facebook pages.

The move, announced in a blog post on Wednesday, is a new response among tech giants under attack by news publishers, which have blamed them for destroying their advertising business.

The Australian government has said it plans to put the legislation, which effectively forces Google and Facebook to strike deals with media companies or have fees set, to a vote in coming weeks.

"If it is not already clear, Facebook is not compatible with democracy," David Cicilline, the chairman of the US House of Representatives' powerful subcommittee on antitrust, commercial and administrative law, said, following Facebook's move.

"Threatening to bring an entire country to its knees to agree to Facebook's terms is the ultimate admission of monopoly power."

Google also threatened to shut down its search engine in the country to avoid "unworkable" content laws, even as it has secured deals with publishers in the UK, Germany, France, Brazil and Argentina for its Google News Showcase product.

On Wednesday, Google reached a landmark global deal with Rupert Murdoch's News Corp, owner of The Wall Street Journal  and two thirds of Australia's major city newspapers, to develop a subscription platform and share advertising revenue.

Facebook said the planned legislation "fundamentally misunderstands" the relationship between itself and publishers.

It said news outlets voluntarily posted their article links on Facebook, which helped Australian publishers to earn about A$407 million ($315.5m) in 2020 through referrals.

Emily Bell, director of the Tow Centre for Digital Journalism at Columbia Journalism School, tweeted on Wednesday that the relationship was not as voluntary as it seemed, and most publishers felt obliged to be on Facebook because of its dominance.

Facebook, which has long been criticised for allowing misinformation on its platforms, is now in the peculiar position of also blocking the news media that provided fact checks on false content.