Meta has turned the screws in yet another battle between big tech and traditional media, warning it could block news content on Facebook across Australia.
The tech giant’s comments represent the strongest indication yet that it’s prepared to adopt the same hardline stance in Australia that it took in Canada in 2023 when faced with similar legislation. The audacious move is anticipated to redefine the future of digital news consumption.
At the heart of this conflict lies Australia’s News Media Bargaining Code, a piece of legislation that pressures tech companies to negotiate fair compensation with news organisations. According to Norton Rose Fulbright, the Code has been designed to address the significant bargaining power imbalance between digital platforms and news businesses, ensuring that news outlets are fairly remunerated for their content.
For years, news organisations have watched their advertising revenues plummet as readers increasingly turn to social media for their daily news fix. The Code seeks to rectify this by acknowledging the symbiotic relationship between platforms and publishers, ensuring that the creators of quality journalism receive a fair share of the digital advertising pie.
Then, in March of this year, Meta said it would not extend its 2021 deals to pay for news, which were struck under the News Media Bargaining Code first introduced when Morrison was still prime minister. When asked if the company would block Australians from sharing news content to avoid paying fees, Meta’s regional policy director Mia Garlick told Australian lawmakers at the inquiry, “All options are on the table,” adding that “there’s a large number of channels that people can get news content from.”
In retaliation, assistant treasurer Stephen Jones of Australia is now considering using the Code’s powers to “designate” Meta to negotiate with news providers or face fines up to 10% of its Australian revenue.
Industry Impact:
Let us examine the potential industry-wide implications if Meta decides to proceed with pulling news from Facebook in Australia. First, the ban will mean large traffic declines for news publishers whose audience engagement is massively reliant on Facebook. This could push publishers to reconsider alternative distribution strategies, such as other social networks or direct-to-subscriber models.
Conversely, consumers might wind up with a fractured news experience–making it harder for them to find reliable sources on Facebook. Filling that news vacuum could mean more fake information is circulated on unofficial channels. Ultimately, such a development will be watched closely by governments worldwide; hence, a successful blockade by Meta could inspire similar legislative attempts elsewhere, while a regulatory victory in Australia might encourage stricter controls on tech companies globally.
The bigger picture
Meta’s position is just another battle in the perennial war between regulation and innovation. As governments around the world try to develop a digital economy that is equitable for all, tech firms are increasingly flexing their muscle in policy development. The stakes run far deeper: What happens in this showdown with Australia might reshape how news is shared and consumed – or even monetised – across the planet.
In light of Meta’s stand, the Australian government remains steadfast in its commitment to implementing the News Media Bargaining Code. The Code sets a precedent for the relationship between digital platforms and news publishers and tests the resilience of legislative measures against the power of tech giants.
Norton Rose Fulbright notes that the Code’s success or failure could significantly impact future regulatory frameworks globally. For now, the Industry waits with bated breath, watching as this high-stakes game of brinkmanship unfolds. The future of digital news distribution and the balance of power between traditional media and tech giants hangs in the balance.
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