Facebook plays down value of news content

News content is ‘highly substitutable’; most users not coming to Facebook for news, the platforms says.

Facebook's response comes less than a month after the Australian Competition & Consumer Commission called for help in drawing up a draft news media and digital platforms bargaining code. Picture: AFP

Facebook has played down the value that news stories bring to its operations, as Australia looks to introduce a news media and digital platforms bargaining code that would force technology giants to pay media companies for the news they carry on their platforms.

In its hefty 58-page response to the Australian mandatory news media bargaining code concepts paper, Facebook says "even if there is indirect value to digital platforms from news content, it is not healthy nor sustainable to expect that two private companies, Facebook and Google, are solely responsible for supporting a public good and solving the challenges faced by the Australian media industry".

"If there were no news content available on Facebook in Australia, we are confident the impact on Facebook’s community metrics and revenues in Australia would not be significant, because news content is highly substitutable and most users do not come to Facebook with the intention of viewing news.

"But the absence of news on Facebook would mean publishers miss out on the commercial benefits of reaching a wide and diverse audience, and social value would be diminished because news would be harder to access for millions of Australians," Facebook said.

"Given the social value and benefit to news publishers, we would strongly prefer to continue enabling news publishers’ content to be available on our platform."

Facebook's response comes less than a month after the Australian Competition & Consumer Commission called for help in drawing up a draft news media and digital platforms bargaining code.

The ACCC’s concepts paper set out a range of issues for which it wanted feedback and information, including what should be included in the draft bargaining code and how particular issues should be addressed.

The concepts paper includes 59 consultation questions, including how “news” should be defined for the purpose of determining the type of content to be subject to the bargaining code. In addition it will cover how a bargaining code can “ensure that both news media business and digital platforms can easily and objectively identify the content subject to the code”.

In a landmark move, the Morrison government announced in April that it had directed the ACCC to develop a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and tech companies.

Nine chairman Peter Costello has said that revenue from the platforms could be worth $600 million annually, while News Corp Australasia executive chairman Michael Miller has said real estimates could be as high as $1bn.

News Corp is the publisher of The Australian.

Mr Miller has also said the new code of conduct needed to be about more than just money, and should address crucial issues such as algorithms and data sharing.

The Morrison government has instructed the ACCC that a draft mandatory code be released for public consultation before the end of July, with a final code to be settled shortly afterwards.

Key issues will be new revenue sources for media organisations as well as the imbalance in negotiating power between media and the platforms were two key issues to be addressed.