‘Punitive’ and ‘untidy’: Meta talks tough on media bargaining

Facebook’s owner Meta has issued another veiled threat to remove news from the social media platform if the federal government does not revoke or amend the current media bargaining laws.

The laws, passed in 2021, have led to internet giants paying news publishers tens of millions of dollars. Meta, in a May 2022 submission to a government review, said the laws had distorted its approach to investment in news media and failed to fix the challenges facing the sector.

Facebook and Instagram’s parent company Meta described Australia’s news media bargaining code as “untidy” and a “short-term compromise” in a scathing submission last year.Credit: Gabby Jones

The submission, released on Tuesday, is the first detailed declaration of Meta’s position since it signed a raft of deals with Australian publishers in 2021. It potentially sets up a difficult decision for the Albanese government, which will have to decide whether to change the laws or enforce them if the dispute comes to a head.

“Since its passage, the law has been globally touted by publishers as a successful model to
support public interest journalism,” Meta said in the submission. “It is better described as an untidy and short-term compromise that we have nonetheless tried to work with in good faith.”

“While we were already planning to invest in Australian news prior to the legislation passing, the law distorted our approach to investment.”

“As long as the law stands and any digital platform can face designation, it will deter platforms from making news available on their services or attempting to work with publishers to solve their business model challenges.”

Australia’s news media bargaining code was introduced in an effort to force Google and Facebook to pay eligible news publishers to display articles in the search engine and “newsfeed”.

It was introduced after the competition regulator found there was an imbalance of bargaining power between media companies and digital platforms and led to millions of dollars worth of deals between the digital giants and media companies including Nine Entertainment Co, owner of this masthead, News Corp Australia, publisher of The Australian and Herald Sun, the ABC and Guardian Australia.

But the code does not actually apply to Google or Meta because they have not been “designated” as a result of the quasi-voluntary deals they have struck outside its remit. Being designated under the code would mean Meta or Google would be legally required to enter negotiations with eligible publishers or risk fines of up to 10 per cent of their Australian revenue.

Meta’s comments, while scathing, are unsurprising: the $US453.6 billion tech giant removed news content from its platform in 2021, in an attempt to stop the legislation. It has since made public remarks in the US and the UK about its concerns regarding the code and shrunk its international news partnerships division, diverting its attention to the creator economy. The measures indicate Meta is resistant to renewing existing deals, which expire in early 2023.

The news media bargaining code was introduced to force Google and Facebook to pay news publishers to display articles in the search engine and “newsfeed”.Credit: Louie Douvis

“A more punitive law means digital platforms will feel they have no choice but to make increasingly uncommercial decisions to try to stave off the risk of designation,” the company said.

Meta’s views are not shared by local news media outlets or former competition tsar Rod Sims, who believes it should be legally forced to do deals because of its reluctance to do so under the existing arrangement.

Meta’s submission, which also touted the deals it had signed with publishers and its broader investment in news innovation, was made public alongside a range of others from media outlets and search giant Google.

Google’s submission spruiks its partnerships with media organisations large and small, from cash payments to training and funding internships.

But it stops short of endorsing the code, saying it values being able to strike deals outside its operation “in a way that makes sense for our business and in a non-adversarial context.”

The internet search giant wants the government to tighten up which news publishers are included under the code, warning that there are niche lifestyle publications, city guides, opinion sites and aggregators that have or could seek to claim money intended for genuine public interest news publishers.

It added “industry-specific news, sports, recreation, arts, lifestyle or entertainment” should be excluded from the code’s definition of core news.

Nine, one of the major beneficiaries of the news media bargaining code alongside News Corp Australia, said in its submission that it was worried existing contracts may not be renewed. If this does occur, it would put financial pressure on newsrooms across Australia that have used the money to invest in staff and resources.

“Nine is concerned that...there will be conduct which has the purpose or effect of significantly devaluing the news content prior to a commercial negotiation taking place,” it added in a redacted submission which was visible once moved to another document and first reported by the Australian Financial Review.

“Nine is concerned that without designation or a clear statement of expectation from the government in relation to services and platforms that should be designated, Google and Facebook will not be as willing to enter into genuine negotiations with Nine and other Australian media businesses in the future.”

A submission from online news website Guardian Australia said the threat of designation was the correct approach in the first instance, and that it would like to see it extended to other social media platforms such as TikTok, YouTube and Twitter. The organisation also took aim at Facebook’s refusal to engage with some outlets - namely SBS and The Conversation.

“This is another distorted outcome from the lack of designation of Google and Facebook under the legislation, thereby enabling both platforms to pick winners by choosing which news organisations to complete agreements with in order to reduce the chance of designation,” the submission said.

The federal government’s review into the effectiveness of the code was released in December and was described as “success to date”. But it raised eyebrows among media executives for its failure to propose any changes to the framework and for the absence of commentary on Meta’s resistance to strike deals.

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