Facebook Threatens to Remove News Feed In Australia if Link Tax Becomes Law

Australia is getting closer to making the link tax the law of the land. In response, Facebook says it wil delete the news feed for Australian users.

The suicidal link tax law certainly isn’t going away, though we haven’t heard much in the way of developments in recent weeks.

The link tax law is basically a massive cash grab by big publishing. In short, news aggregators posts links to news sites for free. As the aggregators become more popular, news sites benefit from an increase in traffic to their pages. In turn, that translates to more subscribers or more ad revenue as more users land on their page. Google News, one such aggregator, doesn’t even make any money from it. So, it’s basically a free service that benefits all. This has been a comfortable symbiotic relationship that has been beneficial to publishers for years.

More recently, however, big publishing in a number of countries decided that they wanted free money out of the deal. So, they started demanding money from aggregators for the privilege of sending them free traffic. Aggregators, logically, said “no”. In response, big publishing then went running to government, demanded that aggregators should be sending them free money for the privilege of linking to their sites. In the process, they launched numerous conspiracy theories not based on facts that said how aggregators are somehow “stealing” their news and profiteering off of their work. The reality, of course, is that aggregators simply use snippets and thumbnails to encourage users to go to the source news articles – something that is well within the bounds of various fair use or fair dealing laws in many countries.

A couple of years ago, Spain was the first country to cave to big publishing and pass a link tax law. In response, Google News simply shuttered their news aggregation service. The effect wound up being profound. Traffic to news sources plummeted and ad and subscription revenue quickly dried up. Spanish publishers then begged Google News to come back – an admission that their grand experiment was a massive failure. In more recent months, big publishing is attempting to re-write history by saying that publishers hardly felt the effects of Google news pulling out in an effort to take another kick at this can.

In Europe, following political death threats from big publishing and procedural confusion, the link tax law was passed under highly questionable circumstances. On the international realm, it was a moment of validation for the suicidal link tax law for big publishing. They took this moment as a stepping stone to try and get a link tax law implemented in as many countries as possible.

France became a major battle ground as the government when they quickly forged ahead with implementing the European law. In response, Google went ahead with long-standing warnings and deleted snippets from their engine. The perfectly legal move sparked howls of protest from French publishers. Along with their politicians, they called the move “unacceptable” and demanded that Google be forced to post snippets so they would be forced to pay the tax. French regulators then carried out marching orders by big publishing and ruled that Google must use snippets in their news service and they must pay the link tax retroactively. While everyone expected Google to simply leave the country, Google made the surprise move that they would cave to the regulatory pressure and pay the arbitrary link tax.

Meanwhile, in Australia, big publishing is also seeking to implement their own link tax law. Back in April, we last saw developments in that story. In that report, we noted how a final decision was originally due in November. However, big publishing is pushing for these laws to move ahead more quickly. Now, we are seeing another development in this long-running story.

Facebook is saying that they will probably pull their news feeds for Australian users should the link tax law move ahead. From CNN:

Facebook (FB) is warning its users in Australia that it will prevent them from sharing local and international news if the country moves forward with new legislation that would force the company to pay media outlets for the use of their news content.

“This is not our first choice — it is our last,” Will Easton, managing director of Facebook Australia and New Zealand, wrote in a blog post Monday. “But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”

The move marks another dramatic escalation of tension in Australia over the proposed law, which was announced in July.

Last month, Google (GOOGL) also expressed its opposition to the legislation, using its search engine homepage in Australia to warn local users that it would harm their ability to search and lead to “consequences” for YouTube users.

The article goes on to push the narrative that this whole debate is more about “leveling the playing field” even though this is not what this debate is all about. That same article says that news rooms have been shuttering due to reduced revenues, but fails to note that those closures have nothing to do with news aggregators. After all, how is it Facebook’s problem that a small news room is going under? If anything, Facebook tried to help keep that news room afloat – and yet it is somehow all their fault this is happening. Really, a more accurate description of the situation is “biting the hand that feeds you”.

A question at this point is, is there anything mandating Facebook to carry a news feed in Australia? Even if there was, could that be challenged in the first place on the grounds that it’s overreaching? If there isn’t a law mandating that, Facebook’s move is quite understandable. As proven by the Spanish case, publishers need aggregators more than aggregators need publishers. Once the aggregators pull up stakes and leave thanks to an unfair legal environment, publishers will wind up getting hurt. Assuming the likes of Facebook and Google somehow owe you both money and traffic is naked entitlement that is undeserved. Aggregators don’t need to link to you nor do they owe you money for the service.

While the French case wound up being a highly unfortunate setback, the latest development in Australia is certainly an interesting one. Once Facebook deletes the news feeds for Australian users, we might start to see a repeat of the Spanish case and finally start working towards going back to normalcy in this area.

Drew Wilson on Twitter: @icecube85 and Facebook.



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