Albanese government furious over Meta’s plan to pull out of Facebook news deal

Prime Minister Anthony Albanese has rebuked Facebook’s parent company Meta for its decision to pull millions in funding from Australian news organisations, labelling the move “untenable” and flagging action against the tech giant.

Meta, which is the world’s largest social media company, announced on Friday it would not renegotiate new deals as part of the news media bargaining code, a move publishers said would cost them millions of dollars in annual funding and likely affect local jobs.

Meta, in a blog post, said interest in its Facebook news tab had declined by 80 per cent. Credit: .

“It is absolutely critical that the media is able to function and be properly funded,” Albanese said in Melbourne on Friday.

“We will consider what options we have available and we will talk to the media companies as well.

“The idea that one company can profit from others’ investment, not just investment in capital but investment in people, investment in journalism is unfair. That’s not the Australian way.”

The prime minister’s comments are a clear sign the Labor government is furious with Meta’s decision and is preparing a decisive response.

Assistant Treasurer and Minister for Financial Services Stephen Jones is handling the government’s response. Credit: Alex Ellinghausen

Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland accused the tech giant of “a dereliction of its commitment to the sustainability of Australian news media.”

Jones signalled the government is prepared to use the news media bargaining code, put in place by former treasurer Josh Frydenberg, to force Meta back to the table to negotiate with Australian media companies for the millions of dollars in content they provide.

The company also announced its decision to scrap its news bookmark tab via a blog post, and said it will not strike new commercial deals with local publishers when they expire later this year.

“To ensure that we continue to invest in products and services that drive user engagement, we will not enter into new commercial deals for traditional news content in these countries and will not offer new Facebook products specifically for news publishers in the future,” the statement said.

The ACCC’s estimate was that the total value of the media deals struck by Google and Meta were worth about $200 million a year to media companies, with two thirds of that coming from Google and one third, or about $66 million, from Meta. In January, Meta passed a market capitalisation of $US1 trillion ($1.5 trillion) and the company is worth about $US1.25 trillion.

Jones and Rowland damned the move in a joint statement, saying the government had made its expectations clear.

“The decision removes a significant source of revenue for Australian news media businesses. Australian news publishers deserve fair compensation for the content they provide. The Australian government is committed to the news media bargaining code and is seeking advice from Treasury and the ACCC (Australian Competition and Consumer Commission) on next steps,” they said.

“We will now work through all available options under the news media bargaining code.”

Meta’s announcement said the “deprecation” of the Facebook news tab did not impact the terms of its existing agreements with publishers in Australia, France or Germany.

“This is part of an ongoing effort to better align our investments to our products and services people value the most,” the company said in a blog post, adding more users are shifting towards short-form video.

The post said the number of people using the Facebook news tab in both countries had dropped by 80 per cent in the last year, and that its users did not use Facebook for news or political content.

“As we previously shared in 2023, news makes up less than 3 per cent of what people around the world see in their Facebook feed, and is a small part of the Facebook experience for the vast majority of people.”

Liberal shadow ministers David Coleman and Angus Taylor called on the government to “consider all options” to ensure local publishers would be fairly remunerated for their content.

“When Meta made similar announcements in the UK, France and Germany in September last year, the government should have immediately taken measures to prevent this from happening in Australia,” they said in a statement.

“If the government is serious about competition, they must not allow digital service providers to hold Australian jobs and publishers hostage to dominant market power.”

Former ACCC boss Rod Sims, who helped architect the news media bargaining code, said Meta’s decision not to share any of its huge profits with Australian publishers was “extremely selfish”.

“They don’t seem to have much concern for having trusted news on their platforms – which continues the trend of platforms wanting extreme views to keep people,” he said.

Former competition boss Rod Sims has described Meta’s move as “extremely selfish”.Credit: Wolter Peeters

Sims said the federal government should take its time consulting the ACCC, Treasury and media companies and then make a call on whether to “designate” Facebook, which would force the social media giant into arbitration with media companies to determine remuneration for news content.

But he warned Meta could escalate the dispute as it had done in 2021, when it blocked Australian news from its platform, a move that was widely criticised.

An industry source, who asked not to be named so they could speak freely, said big media companies in Australia were taking very seriously Meta’s threat to walk away from news entirely, pointing to their decision to do this in Canada.

The Australian deal Meta had struck three years ago had created a precedent, the source said, and the company was determined not to let it spread around the world.

The news media bargaining code was created three years ago as an effort to force the likes of Facebook and Google to compensate publishers for news, and to address a perceived power imbalance between Australian news businesses and the US-based tech giants.

Under the legislation, the treasurer can designate digital platforms, including Facebook and Google, and require them to pay for their use of news content.

Facebook and Google avoided designation by agreeing to a series of deals in 2021 with publishers including the ABC, Guardian Australia, News Corp Australia, Seven West Media and Nine Entertainment, the owner of this masthead.

Several parties, including Seven West Media boss James Warburton, Network 10, Greens Senator Sarah Hanson-Young and commercial television lobby FreeTV have called on the government to designate the platform under the code.

“The case has not only been made but proven, and we welcome ministers Jones and Rowland’s commitment to the news media bargaining code. We will work constructively with the ACCC and Treasury to ensure their designation,” said Warburton.

Hanson-Young called for the platform’s immediate designation, saying the move was “a huge blow to public interest journalism”. FreeTV chief Bridget Fair said there has never been a more important time for news media businesses to be fairly remunerated for trusted news content.

Nine chief executive Mike Sneesby said Meta’s decision failed to recognise the value its journalism offers the platforms, and that the deals remain in the national interest.

“Regardless of the Meta announcement today, the value created on their platform from the use of Nine’s IP is both unquestionable and growing, and we strongly believe Meta should negotiate in good faith around the fair compensation for that value exchange,” Sneesby said.

News Corp Australia executive chair Michael Miller said that Meta’s decision would likely cost local journalism jobs. He said regional and rural communities in particular would suffer from the loss of media funding.

“With less revenue coming into the industry you would have to assume that the industry will have to suffer some losses, and the main area would be people,” he said. “That means less local stories.

“Meta’s decision will directly impact the viability of Australia’s many small and regional publishers and this is a pressing issue for the government to confront.”

Miller said Facebook had conditioned millions of Australians to use its platform as a source of news, and had profited from that behaviour.

“This decision shows contempt for Australia and its own loyal customers,” he said. “I don’t think Australians will react well to today’s news. And I don’t put Google in the same bucket, Google have been very collaborative.”

Earlier this week, Frydenberg said it was “vital for Australian journalism these deals are kept in place” and that the deal he had hammered out had pumped millions of dollars into public interest journalism in Australia.

Any move by the government to designate Meta and force them back to the bargaining table could take months to put in place because of the volume of data the ACCC will have to collect.

There is concern that a so-called poison pill in the legislation would allow Meta to walk immediately – and not pay out the money it is due to pay out until June 30, 2024 – if the government rapidly designated Meta.

The government is also looking at other forms of pressure that can be brought to bear on Meta, such as the small amount of tax it pays in Australia and the platform’s at times harmful impact on young people.

US-based media industry veteran Jason Kint said that Facebook’s decision to walk away from Australian news was the latest example of poor behaviour from the tech giant.

“In the past six months, Facebook and Instagram have blocked all news in Canada, unblocked all ads lying about the 2020 elections in the US, been sued by governments and school districts for knowingly harming children and now appears set to withdraw all owed funding of news in Australia,” he told this masthead.

“The company’s willingness to trade democracy for profits is on centre stage and the public, advertisers and governments need to hold them accountable.”

The majority of Meta’s three-year deals are set to expire this year, alongside many brokered with Google. Some Google deals run for five years.

A source close to Google not authorised to speak publicly said that the tech giant had begun renegotiating some of its deals with local publishers.

In 2022, Facebook’s tax bill in Australia was $24 million but the company funnelled nearly $1 billion in local ad revenue to its parent company overseas.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.