Antitrust Law Daily Facebook restricts news content in Australia, faces new privacy fines in Italy
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Wednesday, February 17, 2021

Facebook restricts news content in Australia, faces new privacy fines in Italy

By Jeffrey May, J.D.

Media law supported by Australian Competition and Consumer Commission leads Facebook to pull plug on sharing or viewing of news content. Separately, Italian antitrust watchdog says company failed to take corrective measures required by November 2018 privacy action.

Facebook announced today that, in response to Australia’s proposed new Media Bargaining law, it will stop allowing publishers and people in Australia from sharing or viewing Australian and international news content. Globally, posting and sharing news links from Australian publishers is also restricted.

The proposed law, which was supported by Australian Competition and Consumer Commission (ACCC), is intended to encourage news companies and digital platform corporations, like Facebook and Google, to strike deals for the payment of news available on the platforms. In an open letter to Australians last August, Google criticized the proposal. However, Google is reportedly working with news companies to work out such agreements.

Facebook, on the other hand, has now decided to cut news instead, after engaging unsuccessfully with the ACCC and other parts of the Australian government to reach a resolution. The company takes the position that the new regulation misunderstands the dynamics of the Internet and will do damage to the very news organizations the government is trying to protect. It says that the measure seeks to "penalize Facebook for content it didn’t take or ask for."

According to Facebook, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue. It sees business gain from news as minimal, with news making up less than four percent of the content people see in their News Feed.

Role of ACCC. In 2017, the ACCC was directed to conduct an inquiry into digital platforms. Following the release of a final report in 2019, the Australian government asked the ACCC to work with Google, Facebook and news companies to develop and implement voluntary codes of conduct. In April 2020, the government directed the ACCC to develop a mandatory code of conduct after the competition agency reported that the core issue of payment for content was highly unlikely to be resolved through this voluntary process.

In September 2020, the ACCC said that a threat from Facebook to prevent sharing of news on its platform in Australia was "ill-timed and misconceived." The ACCC added that Facebook already paid some media for news content and that the code simply aimed to bring fairness and transparency to Facebook and Google’s relationships with Australian news media businesses.

Privacy concerns in Italy. Separately, the Italian Competition Authority (ICA) announced today that Facebook Ireland Ltd. and Facebook Inc. have been fined a total of e7 million (approximately U.S. $8.4 million) for failing to clearly and immediately inform registering users of the commercial use of a user's data. The agency said that the companies failed to comply with a November 2018 requirement to update the website. The ICA expected the update in December 2020 and contends that it has yet to be made. Facebook apparently did not go far enough in updating its registration page for Italian users.

In November 2018, following a seven-month investigation, the ICA informed the companies of the need for the website changes. It also fined the companies for misleading consumers into registering in the Facebook platform. The ICA contends that Facebook is not adequately and immediately informing users during the creation of an account that the data they provide would be used for commercial purposes. According to the agency, the information provided by Facebook is general and incomplete and does not adequately make a distinction between the use of data to personalize the service and the commercial use of data to carry out advertising campaigns aimed at specific targets.

The agency in November 2018 ordered the publication of an amendment statement on the homepage of the company website for Italy, on the Facebook app, and on the personal page of each registered Italian user. The current fines are the result of two separate sanctions against Facebook: e5 million for violating a warning and e2 million for noncompliance in not having published the amended notice to consumers. The agency says that the conduct is attributable to both Facebook Ireland Ltd. and parent company Facebook Inc.

The companies have 60 days to appeal.

Companies: Facebook Ireland Ltd.; Facebook Inc.

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