Facebook has declared it is not “our role to remove content that one side of a political debate considers to be false” in a final, positive, self-assessment of its actions in response to the death tax misinformation circulating on the platform during the May federal election.

In correspondence seen by Guardian Australia, Simon Milner, the Singapore-based vice-president of the social media giant in the Asia-Pacific, tells Labor’s outgoing national secretary, Noah Carroll: “I understand that your preference would be for Facebook to remove all content that you believe constitutes misinformation – which in this instance mean all content that discussed whether or not Labor intends to introduce a death tax – rather than demote it; however Facebook only removes content that violates our community standards.

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“We do not agree that is is our role to remove content that one side of a political debate considers to be false,” Milner says in the letter sent a month after election day.

The Facebook executive says the company invested significantly in an effort to support “the Australian government’s work to safeguard the 2019 election” and said the requirement for the social media giant was to “respect applicable law” and work with the Australian Electoral Commission by responding to queries or concerns.

The backwards and forwards between Labor and the social media behemoth comes as Facebook is firmly in the sights of Australia’s competition and consumer regulator as a consequence of its landmark review of digital platforms.

One of the recommendations of the ACCC review, released last week, was digital platforms be required to implement a code of conduct to govern how they handled complaints about the spread of inaccurate information, which would be registered and enforced by an independent regulator such as the Australian Communications and Media Authority.

While Milner makes a rhetorical distinction in his letter to Carroll about content that one side of a political debate “considers to be false”, the Facebook executive also acknowledges in the same correspondence that the death tax material circulated on the social media platform during the campaign was, in fact, found to be false by the platform’s independent fact-checking procedures.

Milner says once the claims were found to be false on April 30, “we demoted the original posts and thousands of similar posts”. Posts were demoted in Facebook’s News Feed but not removed from the platform. Milner said that, on average, this practice reduces distribution by 80%.

In justifying Facebook’s response to repeated Labor requests to stem the misinformation during the campaign, the senior executive also repeated the platform’s policy not to fact-check any posts from politicians and political parties, “meaning that no death tax content from political candidates or parties was affected” by the platform’s remediation efforts.

The controversy has prompted yet more criticism of Facebook’s intransigence in providing full transparency around political advertising on its platform.

Prof Axel Bruns, an expert with the digital media research centre at the Queensland University of Technology, said he understood the company’s reluctance to get tied up in determinations of truth, a position he said would “open a can of worms”.

But Bruns said the steps Facebook had taken to provide transparency around political advertising – chiefly through its ad archive – were fundamentally flawed and did not allow users to find political ads unless they first knew what they were looking for. Facebook also made it difficult for other government bodies like the Australian Electoral Commission to access its data, he said.

“There is no easy solution,” Bruns said. “But in the first place if Facebook is serious about saying ‘other people should deal with it, we don’t want to be in this space’, they will need to enable other people to do that job. And that means making the ad archive much more open and accessible.

“With Facebook, more fundamentally I would say a lot of what they say or the actions they take are often designed to generate positive publicity rather than achieve real change.”

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An investigation by Guardian Australia in June revealed the death tax misinformation was, initially, a slow burn.

Three key events laid the foundations for the scare campaign: a Daily Telegraph article on 21 July 2018 reporting that the Australian Council of Trade Unions supported an inheritance tax, an uncritical follow-up discussion on the Sunrise program the following day, and a media release by Josh Frydenberg on 24 January 2019 warning of Labor’s supposed plans.

But once the election campaign was in full swing, false material was shared on Facebook both through public posts and private direct messages. Material sent en masse through direct messages included: “Labor, the Greens and Unions have signed an agreement to introduce a 40% inheritance tax.” The messages all linked back to Frydenberg’s January press release.

Labor first asked Facebook to take action against the fake news about the death tax proliferating on its platform on 18 April. The Labor campaign then sent a dossier of material to the social media giant over the weekend of 11 and 12 May.

Unhappy with Facebook’s response, and with some evidence emerging of a coordinated and well-financed effort to boost the death tax messaging, Labor then asked for the complaints to be escalated within the company. Three days before the election, Carroll spoke to Milner by teleconference.

According to Labor campaign insiders, Milner reiterated previous advice given the campaign about fact checking activities and demotion, but told Labor’s digital team he would provide a report with some urgency on the concrete steps Facebook was taking to limit the damage.

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Milner says he sent a follow up email to Carroll on May 17, the day before the election, which addressed how demotion worked, and identified that death tax was not one of the most-discussed topics on Facebook during the election contest.

Carroll wrote to Milner again on June 4 reminding him that he had promised to supply a report demonstrating “identifiable and measurable steps Facebook had taken to combat the spread of this specific misinformation campaign”.

“I am yet to receive any information beyond a reference to a broad and generic second last week activity report which failed to list death tax as an issue being searched amongst several at all,” the national secretary said in his letter.

The letter from Milner defending Facebook’s practices seen by Guardian Australia was sent to Carroll on 18 June – a month after election day.