Facebook exit would be an ‘existential moment’ for media, Costello warns

Facebook and Instagram owner Meta’s decision to opt out of commercial deals with Australian news publishers has prompted an “existential moment” for media companies, says Nine chairman Peter Costello, former head of the Future Fund.

Making the comments at The Australian Financial Review’s business summit in Sydney on Monday, Costello said Meta’s decision to pull almost $70 million in annual revenue for news organisations would put reputable journalism at risk.

Nine chairman Peter Costello said Meta should be subject to improved government regulation.Credit: Peter Rae

“If our media goes the way of everybody being drawn on platforms with free unedited content, then you won’t have anyone investing in reputable media,” he said.

“This is quite an existential moment for Australian media.”

Costello was also federal treasurer between 1996 and 2007. He recently stood down as chair of the Future Fund after 10 years. He has been chair of Nine, the owner of this masthead, since 2016.

Costello said the $1.8 trillion tech giant’s monopoly position needed to be subject to improved government regulation, but that it was in Meta’s interests to continue to support reputable journalism in Australia.

Responding to the comments, a Meta spokesperson said, “it doesn’t make sense to invest in areas that don’t align with consumer preferences”, pointing to its own reports that users do not use the platform for news.

Publishers could continue to use its free services, they added.

Despite Meta’s plans to shift resources away from its news functions, the spokesperson said the platform was retaining its ongoing commitment to keep misinformation and harmful content off its services.

Meta announced at the start of this month that it would not renegotiate its 13 commercial deals it signed with publishers in 2021 as part of the news media bargaining code when they expire this year, a decision prompting criticism from the industry and politicians. The code was created to address the perceived power imbalance between US tech giants and Australian news organisations.

Nine is among those to have a commercial deal with Meta, alongside Guardian Australia, the ABC, Seven West Media, News Corp, Network 10, Australian Community Media and others.

About two-thirds of the $200 million in revenue provided to media companies under the code is covered by Google.

Meta said its decision was a response to how people were using its services — news now accounted for less than 3 per cent of what users saw in their Facebook feeds. News Corp global chief executive Robert Thomson called this figure “preposterous” and “obviously a fiction” at a Morgan Stanley conference in San Francisco last week.

Parties including Network 10 and Channel Seven, both of which have commercial deals with Meta, alongside Greens senator Sarah Hanson-Young, have called on the government to “designate” the company under the code. Assistant Treasurer Stephen Jones has signalled he is open to designating the company, which would force it to negotiate. It faces a potential fine up to 10 per cent of its local revenue if it refuses.

The Australian Competition and Consumer Commission is gathering information to advise the government on whether it can designate Meta under the code.

Speaking at the same event as Costello, Commonwealth Bank chief executive Matt Comyn said regulating tech giants should be a “very important agenda item” for the federal government.

Comyn, who has previously warned of Apple’s rising power in digital payments, defended domestic industries from accusations of a lack of competition and dominance by a few key players, saying the gaze of regulators and policymakers should also be directed at the global tech giants.

While the big bank boss welcomed the questions asked of corporate Australia in the form of various parliamentary committees, the latest round of which has been directed at the supermarket sector, he said there was “insufficient scrutiny” on major digital platforms and technology firms.

“I hope it is a very important agenda item for both the government and policymakers in this country,” he said.

With AAP

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