Mon 15 June 2020:
Facebook has rejected a proposal to share advertising revenue with news organisations, saying there would “not be significant” impacts on its business if it stopped sharing news altogether.
On Monday, the social media giant issued its response to the Australian Competition and Consumer Commission, which has been tasked with creating a mandatory code of conduct aimed at levelling the playing field.
The treasurer, Josh Frydenberg, told the ACCC to develop a code after multiple Australian media companies and regional newspapers cut jobs, or folded entirely, as a result of advertising downturn during the Covid-19 pandemic.
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,” it said in a thinly veiled threat to boycott local news companies.
“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,” it said.
In an effort being closely watched around the world, Australia is set to unveil plans to force Facebook and Google to share advertising revenue they earn from news featured in their services.
The initiative has been strongly pushed by Australia’s two biggest media companies, Rupert Murdoch’s News Corp and Nine Entertainment.
They argue that the crisis roiling the news industry worldwide is mainly because of Google, Facebook and other large tech firms capturing the vast majority of online advertising revenues, without fairly compensating media companies for advertisements placed against news content.
Newspapers’ loss of advertising dollars has forced cutbacks and bankruptcies across the sector, a process exacerbated by the economic downturn caused by the coronavirus pandemic.
More than 170 newsrooms have seen cuts or halted publication in recent years.
Facebook said it had sent 2.3bn clicks to Australian news publishers in the five months from January to May 2020, which they estimated to be worth $195.8m to the news organisations.
“Despite claims of an ‘imbalance’ that should impede the striking of such agreements, we have been steadily increasing our investments in the Australian news ecosystem,” Facebook said. “We continue to ramp up our direct financial contributions to the news industry – not to make a profit – rather because we believe news is a public good and it plays an important social function.”
Instead of the ACCC’s proposal of a body that could issue financial penalties and binding dispute resolution, Facebook proposed the creation of an “Australian Digital News Council” that will mediate complaints from news organisations, based on the Australian Press Council as a model.
The social media company also objected to the focus on itself and Google, and disputed the idea that it “possesses unequal bargaining power compared to some of the largest media companies in Australia”.
“The decision to limit the initial version of the code to two US companies is discriminatory and will inevitably give an unfair advantage to Facebook’s competitors in the technology sector, including rivals from countries that propagate different and undesirable visions for the internet.”
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