Meta executive claims Australian news outlets used laws to pay debt, reward shareholders

One of Meta’s senior European executives has slammed Australian news outlets claiming they are using the money they received under bargaining laws to pay down debt and reward shareholders, as a senior Google executive claimed his company didn’t understand how the code worked.

Australian Treasury is preparing to run a series of roundtables to evaluate the effectiveness of its framework, which was introduced last February to force Google and Meta into negotiations with media outlets for use of their content. The tech giant executives shared very different views on the company experience with the creation of the laws.

A Meta executive has criticised the way media has handled money while a Google executive said no one understands how the media bargaining laws work.Credit: Getty

John Severinson, head of partner development at Meta, said the laws did not encourage collaboration between media and tech companies.

“The government should encourage the development of new business models. One of the learnings from Australia is that it doesn’t solve - or attempt to solve - the underlying issue in that the business model of journalism online is broken and needs to transition to a new reality,” Severinson said.

“We can see the agreements that we have closed with publishers in Australia following all the events over there, some of these publishers have used this money instead to pay down debt or give it to shareholders. It doesn’t incentivise collaboration, and we think smart regulation should do that.”

Severinson did not say which Australian media companies he was referring to. Several media businesses have rewarded shareholders and/or paid down debt since receiving payments from the US groups under the deal arrangements, but the specific uses for the money received from Google and Meta have not been publicly disclosed, and therefore, this masthead was unable to verify Severinson’s allegations.

Meanwhile, Tom Morrison-Bell, Google’s government affairs and public policy manager, said the Australian government recognised Google’s licensing deals for its News Showcase product were the best way forward as opposed the way deals could be struck under the code.

“Nobody has been designated under the code yet, that code has not come into force. Nobody knows how that law works,” Morrison-Bell said. “We worked constructively with the government to find a way forward.”

The comments were made last week at an inquiry into local journalism by the House of Commons in the UK where Google and Meta were asked what they had learnt from the introduction of Australia’s media bargaining laws. But the public comments are not the first since the legislation was introduced last year. Google told a US government department the legislation would be unworkable and harm democracy in the world’s largest economy.

A separate submission by Facebook to the US Copyright Centre also indicated an unwillingness to introduce the legislation outside of Australia. Recent reports in the Wall Street Journal said Meta was reevaluating the news partnerships it has struck with media outlets over the last few years. One article said Meta CEO Mark Zuckerberg was not enthused by making news part of Facebook’s wider offering because of regulatory efforts.

Australian Treasury is currently assessing the effectiveness of the code, which was legislated in an effort to force Google and Facebook to pay eligible large and small 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 the digital platforms.

Facebook was so concerned about the introduction of the code that it withdrew all news from its platform in Australia, while Google threatened to withdraw its search engine from the market. The basis for concern was that the new laws would set a precedent and potentially force Google and Facebook to pay millions of dollars to publishers all over the world (Canada is expected to introduce legislation modelled on the news media bargaining code with some differences, while the United Kingdom announced new competition rules for the tech firms earlier this year).

After high-level negotiations, both tech platforms agreed to continue to operate in Australia and strike deals with news outlets through newly created licensing products.

The government agreed the new Australian laws did not apply -- or ‘be designated’-- to either Google or Facebook as long as they went to the effort to negotiate commercial deals with local news publishers for use of their content. Being designated under the code means Google or Facebook would be legally required to enter negotiations with eligible publishers or risk fines of up to 10 per cent of Australian revenue.

The submissions to Treasury by Google and Meta are not publicly available. But the commentary taking place by Google and Meta’s senior executives on Australia’s regulation are indicative of the concerns that could have been raised with local government. They also suggest it could be difficult for media outlets to renegotiate deals when they expire (most deals are between three and five years).

Google has signed deals with news outlets including News Corp Australia, publisher of The Australian, The Daily Telegraph and The Herald Sun, Nine Entertainment Co, publisher of this masthead and The Australian Financial Review, Seven West Media, Guardian Australia, national broadcasters the ABC and SBS and small news outlets such as Junkee Media and The Saturday Paper.

Facebook has signed deals with most of these media companies, but is refusing to engage with SBS or not-for-profit organisation The Conversation. Former competition tsar Rod Sims said its unwillingness to work with key outlets means it should face designation.

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