Facebook’s founder Mark Zuckerberg has lobbied senior federal ministers about the proposed code forcing the digital giants to pay media companies, and the prime minister has engaged with Microsoft amid threats from Google about removing its search engine from Australia.
With a lobbying offensive in overdrive with Labor expected to endorse the Morrison government’s code after a shadow cabinet meeting this week, and with a Senate inquiry continuing to hear from stakeholders – the treasurer, Josh Frydenberg, confirmed the conversation with Zuckerberg on Sunday.
Facebook has branded the proposed code unworkable in its current form, and has asked for digital platforms to be given six months’ grace to negotiate deals with news companies directly before being hit with mandatory regulations.
Frydenberg told the ABC his discussion with Zuckerberg had been constructive, but the tech mogul had not convinced the Australian government to back down.
With parliament set to resume for 2021, the platforms have engaged politically connected lobbyists and are pulling out all stops to try to scale back or scuttle the proposal.
Google has threatened to remove its search engine from Australia and Facebook has warned it will remove news from its feed for all Australian users if the code proceeds.
As well as confirming the high-level approach from Facebook, Frydenberg also revealed on Sunday that Scott Morrison had spoken to Microsoft, which operates a rival search engine to Google.
He said Microsoft was “watching this very closely” and was “mulling expansion opportunities in Australia”.
The government remained “in detailed discussions with Google, with Facebook, with the other players across the industry” – discussions that had been under way for some time.
Australia’s major media players, hit by technological disruption and by the economic shock associated with Covid-19, have also lobbied extensively for fairer commercial arrangements with the platforms.
The proposed code – a world first – aims to address the imbalance in bargaining power between the news media and tech giants.
Google and Facebook would have to pay for displaying news content and provide media companies with information on changes that might affect their traffic – such as alterations to news rankings or the search algorithm. If they failed to comply, they could be forced to pay hundreds of millions of dollars in fines.
The proposal was developed by Australia’s competition watchdog, the Australian Competition and Consumer Commission.
Although Labor supports the code in principle, its communications spokeswoman, Michelle Rowland, said last week that the government needed to be clear with internet users and businesses what Google’s threatened departure from Australia – if that eventuated – would mean in practical terms.
Frydenberg said on Sunday he didn’t “dismiss the threats” but “I’m not intimidated by them either”.
The code was “the product of an 18-month inquiry, world-leading inquiry, by the ACCC, and at every step of the way, these businesses have been consulted”.
As the process went on, the story from the platforms appeared to be changing: “The goalposts seem to be shifting because originally they had a concern with the algorithm requirements of notification, then it was about value exchange and then it was about a final arbitration model.
“Now we’re told that if we go ahead with this, we’re going to break the internet.”
Frydenberg said the government’s view was it was clear current practices had to change: “What I do know is that media businesses should be paid for content.”
• Guardian Australia has been in discussion with Google over inclusion in its new “Showcase” offering that would see the company pay news providers for inclusion in this product.