This was published 4 years ago
'Not even eligible': Small digital websites fear new tech giant laws could hurt business
By Zoe Samios
Small news and lifestyle websites are concerned they could lose large chunks of their audiences if global tech giants Google and Facebook pull content from their platforms, with some warning the move could entrench the power of larger media companies.
Social media behemoth Facebook told its users last week it would pull news articles from its main website and Instagram in Australia to avoid being penalised under a new code being created by the competition regulator that requires it to pay commercial news organisations such as Nine Entertainment (owner of this masthead) and News Corp Australia for the existence of articles on its platforms.
Some local publishers are worried about Facebook's plans to pull content from its platforms.Credit: AP
The move has raised concerns among some smaller media companies with younger audiences that often find articles through social media. Concrete Playground founder and chief executive Rich Fogarty said he could lose a significant portion of his audience overnight if Facebook and Google removed publishers from their newsfeeds.
"We are not even eligible for the code in its current draft," Mr Fogarty said. "An unintended consequence of the code will likely be the fast tracking of a Nine/News duopoly. New entrants to market will find it harder to break through, and existing content businesses that don't specialise in traditional journalism will be fighting for advertising revenue against the incumbents on an increasingly uneven playing field."
Under the code, companies will have three months to reach an agreement about payment for use of articles. If the tech giants and media companies cannot agree, an arbitrator will make the final decision. The code also includes other rules around notice of algorithm changes and use of consumer data. Google and Facebook have both described the code as 'unworkable' and there is still a disagreement over how much the content is worth. The proposed legislation has caught the attention of global regulators which have tried to force the tech giants to pay for years. The US Trade Representative has also weighed in on the discussions. But traditional media companies like Nine and News Corp have largely welcomed the draft code, which could be legislated by the end of the year.
Others are not pleased. Urban List, Concrete Playground, satirical site Betoota Advocate and youth website Junkee Media were in discussions late last week about Facebook's plans and the implications of the proposed code. Due to previous changes in Facebook's algorithm, these publishers are not as reliant as they once were on the website for audience. However, they still get a large amount of readers to their websites through the platform and some, such as Junkee, have received funding from Facebook for projects.
Most of the digital sites are not eligible to be paid by the tech giants under the new code but, due to anti-discrimination rules, could lose the ability to run articles on the site or receive further funding. Under the proposal, Facebook is unable to treat publishers that are eligible and ineligible to be paid by them differently. As a result, all content from news organisations - irrespective of whether the company is part of the code or not - would be pulled from Facebook and Instagram.
According to Urban List founder and CEO Susannah George, Facebook's plans could also affect local businesses that use these digital websites as a way to reach potential customers.
"The content we create is expressly designed to drive more traffic through the doors and shopping carts of small businesses," Ms George said. "If the channels young Australians usually turn to in order to source that content — like Facebook and Google — are no longer available to them, then we risk cutting off a significant, still-spending support base for the local hospitality, retail and events sectors that desperately need it."
Private Media, which publishes Crikey, Smart Company and The Mandarin, would be paid under the code, but said in a submission to the ACCC that it was unworkable and objectively unfair towards the tech giants. It said there was no limit to how much Facebook or Google would have to pay and that there was no formula for the payment.
"[The government and ACCC] should be focused on an outcome for news journalism not on the mechanism, because it's heading towards a train crash," Private Media chairman Eric Beecher told The Sydney Morning Herald and The Age.
CHE Proximity's chief media officer Ben Shepherd said plans to pay big publishers large sums of money could hurt innovation.
"If Facebook and Google feel it is not viable to make these payments and remove all news from the platform, it removes a valuable and highly effective traffic channel for media companies that view the platforms as an enabler and not an adversary," Mr Shepherd said. "This will limit the traffic of any new entrant and only maximise the incumbent advantage the existing local media companies possess."
However, industry sources indicated there are some publishers that do not believe their content will be taken off Facebook if the tech giant proceeds with its plans. And others are not concerned that removal of articles will hurt them financially.
"While we too have found social media to be quite exciting over the last decade, we have made sure to not become too reliant on it," Betoota Advocate editor Clancy Overell (whose real name is Archer Hamilton) said. "Facebook and Instagram definitely work well alongside our medium of online print, but it would be reckless to build a business model solely around those two platforms."