Meta on collision course with Australian government after announcing end to journalism funding deals

Facebook and Instagram’s parent company, Meta, has set itself on a collision course with the Albanese government after announcing it will stop paying Australian publishers for news, and plans to shut down its news tab in Australia and the United States.

Meta informed publishers on Friday that it would not enter new deals when the current contracts expire this year.

The news tab – a dedicated tab for news in the bookmarks section of Facebook – will also shut down in April, after a similar shut down in the UK, Germany and France last year.

Meta confirmed the plans in a blog post at the same time publishers were informed.

“While we’ll be deprecating Facebook News in these countries, this announcement does not impact the terms under our existing Facebook News agreements with publishers in Australia, France and Germany,” the company said.

“These deals have already expired in the US and the UK. Additionally, to ensure that we continue to invest in products and services that drive user engagement, we will not enter into new commercial deals for traditional news content in these countries and will not offer new Facebook products specifically for news publishers in the future.”

The prime minister, Anthony Albanese, told reporters on Friday the decision was “not the Australian way”.

“We know that it’s absolutely critical that media is able to function properly and be properly funded. Journalism is important and the idea that research and work done by others can be taken free is simply untenable,” he said.

The communications minister, Michelle Rowland, and assistant treasurer, Stephen Jones, called news media companies on Friday following the announcement, advising them the government would be taking all of the steps available under the news media bargaining code.

“We’re not talking about some plucky little startup, we’re talking about one of the world’s largest and most profitable companies,” Jones said. “It has a responsibility to ensure that it pays for the content that … has been used on its platform, and frankly, that it’s making millions and millions of dollars out of it and so the government is adamant it will be backing the code we’ll be taking all of the actions that are available to us under the code.”

The ministers said the government is seeking advice from Treasury and the Australian Competition and Consumer Commission on next steps, which would be resolved quickly, Jones said.

“Nobody should be under any doubts about the government’s resolve to ensure that we have a viable media industry in this country,” Jones said.

Meta said the decision was “part of an ongoing effort to better align our investments to our products and services people value the most”, and that people using Facebook News in Australia and the US had dropped by 80% in the past year.

“We know that people don’t come to Facebook for news and political content – they come to connect with people and discover new opportunities, passions and interests. As we previously shared in 2023, news makes up less than 3% of what people around the world see in their Facebook feed, and is a small part of the Facebook experience for the vast majority of people.”

Facebook, along with Google, signed dozens of deals with publishers in 2021 worth an estimated $200m seeking to avoid being “designated” under the Australian government’s news media bargaining code, which would have forced the digital platforms to negotiate with news publishers for the use of news content on the platforms.

The federal government opted against designating both companies in light of the deals signed.

Before the legislation passed, Facebook removed all news content in Australia, along with hundreds of pages from NGOs and government, in response to the proposed legislation. It has since done this in Canada.

The shadow treasurer, Angus Taylor, and shadow communications minister, David Coleman, said Meta’s refusal was highly disappointing, and the move in Canada should have prompted the government to act sooner.

“This is a world leading competition policy, and the government needs to use it. The warning signs were there and the government ignored them,” Taylor said.

“Labor has been all talk and no action.”

The end of the deals does not mean news links will not be accessible on Facebook, just that the tab is being shut down. Media companies will still be able to post content on their pages.

Rod Sims, who was chair of the ACCC when the news media bargaining code was developed, said Meta was selfish in its decision.

“The platforms often talk about wanting a free internet, but what they mean by that is they get all the benefits from people using their platform but don’t share any of that with people who provide the content on the platform,” he told Guardian Australia.

Sims said he was concerned Meta appeared less interested in having trusted news on its platform.

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“I think that’s a worrying trend, where social media companies obviously want people’s attention so they can advertise to them, but they’re not concerned about the type of content people are looking at on their website, which means they’re not taking responsibility in a way I think they should and that of course is damaging our society.”

Sims said it was up to the ministers to determine whether the powers to force Meta to negotiate should be used, but said it was likely Meta would use the current ban on news links in Canada as a threat of what it could do in response.

The Greens spokesperson for media and communications, senator Sarah Hanson-Young, called for Meta to be designated under the code, which would attract fines of 10% of the company’s Australian revenue if it fails to negotiate with media companies.

“A big tech company like Meta can not be allowed to bully users, journalists and democratically elected governments by deciding which laws of the land they will choose to comply with,” she said.

The lobby group for free-to-air TV, Free TV Australia, backed this call, and said Facebook, Instagram and Reels should be designated.

News Corp Australia’s CEO, Michael Miller, said Meta “is attempting to mislead Australians” by saying its decision is about the closure of the news tab when the vast majority of news on Facebook and Meta is consumed outside of that product.

“Meta is using its immense market power to refuse to negotiate, and the government is right to explore every option for how the Media Bargaining Code’s powers can be used,” he said.

Nine’s CEO, Mike Sneesby, said the decision doesn’t recognise the value of Nine’s journalism to Meta’s platforms.

“Regardless of the Meta announcement today, the value created on their platform from the use of Nine’s IP is both unquestionable and growing and we strongly believe Meta should negotiate in good faith around the fair compensation for that value exchange,” he said.

The ABC’s managing director, David Anderson, said in an email to staff on Friday that under the agreements with Meta and Google the ABC had been able to add 60 journalists to its regional workforce, and expand to 10 new locations in regional Australia. He noted the announcement would be concerning for staff in those locations.

“The loss of this revenue would create a financial challenge for the ABC that would need to be resolved on a whole of ABC basis, and we will continue to work with the government,” he said.

He said the ABC had time to assess the situation before any decisions are made.

“The ABC remains absolutely committed to journalism in regional, rural, and remote Australia.”

Seven West’s CEO, James Warburton, also called for Meta to be designated under the code.

Meta has said that the change will not affect its third-party factchecker network.

While the focus of the code has been on Meta and Google, Jones said the government had reached out to TikTok several weeks ago and it was also expected to bargain with news companies over content payments.

“There would not be an 18-year-old who did not have a TikTok app on their phone today and you talk to … kids, most of them consume most of their news on an app like that,” he said.

TikTok declined to comment.