Facebook will not allow publishers and users in Australia to share local and international news on Facebook and Instagram if the country passes a proposed code which is set to challenge Facebook and Google’s influence over online news, the company said in a blog post on Monday. Facebook said that despite numerous proposals to the Australian government, it was left with a choice of either removing news entirely or “accepting a system that lets publishers charge us for as much content as they want at a price with no clear limits”. “Unfortunately, no business can operate that way,” it added. Before this, Google had earlier warned users that the code would force it to provide users with deteriorated search results, and also put free services at risk in the country.

Australia has put out a draft News Media Bargaining Code for consultation which forces platforms like Facebook and Google to pay Australian news companies for their content. The code also requires platforms to give news companies nearly a month’s notice of any changes to its algorithms which may affect referral traffic to news sites, or those affecting rankings of paywalled news, and “substantial changes” to how news is displayed, and even advertising of news. Google and Facebook would also have to provide data about user engagement on news content on their platforms.

News revenue not substantial for Facebook, it claims: The proposed code is “unprecedented in its reach and seeks to regulate every aspect of how tech companies do business with news publishers. Most perplexing, it would force Facebook to pay news organisations for content that the publishers voluntarily place on our platforms and at a price that ignores the financial value we bring publishers,” Facebook said in a blog post. It also said that news represents a fraction of what people see in their News Feed and is not a significant source of revenue for it. Per this code, if publishers can’t agree on a price for their news on Facebook or Google, it will be determined through arbitration. Google has called this arbitration process “extremely one-sided and unfair”, so much so that “no company should be asked to accept it”.

‘We allow publishers to bring in money,’ Facebook said: Facebook claimed that its platform has allowed news publishers in Australia and other countries to rake in more revenue. It said that posting news on Facebook allows them to sell more subscriptions and advertising. “Over the first five months of 2020 we sent 2.3 billion clicks from Facebook’s News Feed back to Australian news websites at no charge – additional traffic worth an estimated $200 million AUD to Australian publishers,” the company claimed.

The proposed code has affected launch of Facebook News in Australia: Last week, Facebook said it was considering launching its News tab in a handful of countries, including India, but we had pointed out that Australia was a notable absentee from the list, presumably because Facebook doesn’t view the code favourably. In Monday’s blog post, the company confirmed that. “We already invest millions of dollars in Australian news businesses and, during discussions over this legislation, we offered to invest millions more. We had also hoped to bring Facebook News to Australia, a feature on our platform exclusively for news, where we pay publishers for their content,” it said.

Facebook clarified that its products and services in Australia that allow users to “connect” will not be impacted by this decision.