Australia created a world-first media bargaining code, which requires platforms to reimburse Australian media companies for news content they share, last year over opposition from US tech giants Facebook and Google.

It works to encourage the technology giants to strike deals with publishers. If they do not, they can be “designated” under the code and if they still fail to reach an agreement, an arbitrator determines the sum they must pay.

Immediately after the final legislation was passed in Canberra in February 2021 Facebook blocked Australian media pages for five days in what it portrayed as an inevitable response to a law that misunderstood its business. “Publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue,” its local managing director, William Easton, said in a written statement at the time.

At the time, content on Facebook pages from The Sydney Morning Herald and The Age, News Corp newspapers such as The Australian and The Herald Sun, and the ABC were made unavailable.

The effort extended as well to pages for local governments and medical authorities. Facebook blocked the page of Suicide Prevention Australia, West Australian opposition leader Zak Kirkup weeks out from a state election, and the Bureau of Meteorology.

On Friday, Kirkup said the ban, which took about a day to be reversed despite the WA Liberals raising the issue directly with contacts at Facebook, was shocking and deliberate interference in the state election, which he lost decisively.

“It is election interference, the very thing governments and political parties have been battling against from other nation states or foreign entities,” Kirkup said, pointing out that political parties had become reliant on social media to get their message to voters.

Labor premier Mark McGowan’s page was not blocked.

The pages were removed, according to the whistleblowers cited in the Journal report, because Facebook wanted to create maximum pressure on the Australian government. Rather than using a pre-existing list of news publishers, a Facebook team instead created code that deemed any page that shared more than 60 per cent news content as a publisher. The documents suggest web addresses ending in .gov were intended to be excluded.

“It was clear this was not us complying with the law, but a hit on civic institutions and emergency services in Australia,” a whistleblower said.

Public opinion turned sharply against Facebook after the ban rolled out. It began reinstating thousands of pages.

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Days later, Facebook and the government reached a deal that meant the code would not apply to companies that strike reasonable deals with the media outside it, clarified other provisions, and gave the tech giants more notice if they are to face regulatory action.

“The documents in question clearly show that we intended to exempt Australian government Pages from restrictions in an effort to minimise the impact of this misguided and harmful legislation,” Facebook spokesman Andy Stone told the Journal in a reference to the media bargaining code. “When we were unable to do so as intended due to a technical error, we apologised and worked to correct it. Any suggestion to the contrary is categorically and obviously false.”

Stone’s remarks, repeated by Facebook in Australia, do not address whether Facebook intentionally blocked content from non-government organisations, such as Kirkup or suicide prevention charities.

The Facebook documents, seen by the WSJ, were filed as complaints with the US Department of Justice and the ACCC on behalf of a Facebook employee who worked on the project by Whistleblower Aid, a Washington, DC-based non-profit. The ACCC confirmed the complaint but otherwise declined to comment.

“Facebook maintained a chokehold on the channels the Australian government and key community groups use to communicate with the public,” said Andrew Bakaj, who is representing the anonymous whistleblowers.

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“When its interests were threatened, Facebook didn’t hesitate to squeeze. Hard.”

Facebook has since struck deals with major publishers, including News Corp and Nine, the owner of The Sydney Morning Herald and The Age. But Sims said it had refused to reach deals with public broadcaster SBS or academic publisher the Conversation, which put it at risk of being designated under the bargaining code anyway.

Facebook’s behaviour in deliberately banning sites, Sims said, would factor into that decision, which will be made by whoever is Australia’s treasurer after the election.

Communications Minister Paul Fletcher said the News Media Bargaining Code was working as intended to get Facebook and Google to negotiate with publishers for their use of news content that attracts people to their sites.

“If Facebook executives want to portray having to pay out tens of millions of dollars as a win, I’ll leave it to them, merely remarking that it would be a novel use of that word,” Fletcher said in a statement. “The Morrison government came under considerable pressure from both companies. But we did not back down.”

He said other countries such as Canada were now looking to introduce their own bargaining codes, following Australia’s example.

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