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On the morning of 18 February, Australians who opened Facebook to read about the weather or their local hospital found nothing. The page of the Bureau of Meteorology had gone dark, as had that of Queensland Health.^{3Australian Institute of Business (AIB)Facebook bans news in Australia, wherever it's from18 Feb 2021} So had the ABC, Nine and a good deal of the international press, including the BBC and the New York Times.^{3Australian Institute of Business (AIB)Facebook bans news in Australia, wherever it's from18 Feb 2021} Facebook had decided to stop Australians sharing or viewing news. The meteorologists were, it said later, an accident. The rest was policy.^{2Gulf NewsAustralia slams 'heavy-handed' Facebook news blackout18 Feb 2021}

The cause was a bill. Under the News Media and Digital Platforms Mandatory Bargaining Code, which parliament passed on 25 February, Google and Facebook must negotiate with news publishers over payment for the content they show, with compulsory arbitration if talks fail.^{4Anadolu AgencyAustralian parliament passes controversial media law25 Feb 2021} Ministers say the law will ensure that publishers “are fairly remunerated for the content they generate”.^{4Anadolu AgencyAustralian parliament passes controversial media law25 Feb 2021} Facebook called it a law that “fundamentally misunderstands the relationship between our platform and publishers”.^{1FacebookChanges to Sharing and Viewing News on Facebook in Australia22 Feb 2021}

Both sides have found something to welcome, which is usually a sign that something has been bargained away. Facebook said on 22 February that it had reached an agreement with the government and would restore news.^{1FacebookChanges to Sharing and Viewing News on Facebook in Australia22 Feb 2021} The government said Facebook had agreed to reverse its decision and had struck deals with some Australian media.^{4Anadolu AgencyAustralian parliament passes controversial media law25 Feb 2021} Prime Minister Scott Morrison had said Facebook had “unfriended Australia”.^{3Australian Institute of Business (AIB)Facebook bans news in Australia, wherever it's from18 Feb 2021} Within a week he was welcoming its plan to restore the pages.^{4Anadolu AgencyAustralian parliament passes controversial media law25 Feb 2021} Google, which had resisted the law since April 2020, has meanwhile signed deals with a range of news organisations, Mr Morrison said.^{4Anadolu AgencyAustralian parliament passes controversial media law25 Feb 2021}

We think Canberra was right about the problem and is half right about the cure. The problem is real: two firms sit between most Australian readers and most Australian newsrooms, and one of them showed in a morning how little it needs to ask permission. Josh Frydenberg, the Treasurer, called the blackout “heavy-handed” and spoke of “the immense market power of these media digital giants”.^{2Gulf NewsAustralia slams 'heavy-handed' Facebook news blackout18 Feb 2021} It is hard to quarrel with the second phrase once a platform has switched off a country’s news to prove it.

Facebook’s defence deserves a hearing, though. News, it says, is less than 4% of what people see in their News Feed, and the firm estimates it sent Australian publishers about 5.1bn free referrals last year, worth around A$407m.^{1FacebookChanges to Sharing and Viewing News on Facebook in Australia22 Feb 2021} Those are the firm’s own numbers, produced by the party with most to gain from low ones, but the logic is sound. A link is not a copy. Publishers put their stories on Facebook because it brings readers, and a regime that charges the carrier for linking to them is an odd sort of competition policy. If the price of a link is a bill, firms will ration links. Australia has now watched that happen.

Why, then, not scrap the whole idea? Because the alternative to bargaining is not a free market. It is a market in which one side can walk away from the table and take the table with it. The code’s arbitration clause matters less for the cheques it may produce than for the fact that it makes walking away expensive. The clever part is that the code encourages deals struck outside it.^{4Anadolu AgencyAustralian parliament passes controversial media law25 Feb 2021} A platform that pays up voluntarily need never meet an arbitrator, so the threat does the work and the law stays in the drawer.

Our worry is what comes next. The code pays the publishers who happen to be large enough to bargain, in proportion to nothing in particular. Newsrooms that Facebook and Google carry for nothing on the day the law passes will be the ones that cannot afford a lawyer for the arbitration. The government will review the code within a year of it taking effect.^{4Anadolu AgencyAustralian parliament passes controversial media law25 Feb 2021} That review should ask who got paid, how much reached reporters and whether the platforms learned to show less news rather than pay more for it.

Other governments are watching, and some will be tempted to copy the text. They should copy the posture instead. Require platforms to bargain in good faith, which is what the Australian framework asks.^{4Anadolu AgencyAustralian parliament passes controversial media law25 Feb 2021} Make them give notice before changing how news is ranked or shown. Back the rules with a public fund for local reporting that does not depend on a private firm’s mood. And be ready, as Canberra was, for the day the platform pulls the plug.

Facebook told Australia that news was a small part of its business. It then spent a week proving how much Australia cared.