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Meta’s tough stance on news in Australia forewarns global strategy

Meta’s tough stance on news in Australia forewarns global strategy
Meta’s tough stance on news in Australia forewarns global strategy

Last Friday Meta announced that it would be closing Facebook’s news tab feature in Australia and not renewing any of the news licensing deals it struck with Australian publishers following the introduction of the landmark News Media Bargaining Code.

This follows parallel changes it made in the UK, France and Germany at the end of last year. It also announced the closure of its news tab in the US.

The legislative environment and political dynamics for publisher-platform relations are unique in Australia. The fact that Meta has taken this measure in this market is therefore significant for what it tells us about the company’s broader position on news. This includes how effective the UK’s new digital markets regime is likely to be in securing payment from Meta for British publishers.

To understand this, it’s useful to quickly remind ourselves of the background down under.

The Australian NMBC was passed in early 2021. Its purpose is to address the imbalance in negotiating power between publishers and big tech that has, in the view of the former, prevented them from securing payment for the use of news content on search and social platforms. To achieve this it introduces a “final offer arbitration” mechanism. Should a payment-for-content agreement between a publisher and platform not be reached, this involves both parties submitting final, sealed price bids between which the regulator must choose.

Final offer arbitration is a terrifying prospect for Meta and Google. If used, it risks setting a global precedent for content payments which could fundamentally change their cost bases. Both Google and Meta’s businesses would look markedly different if they accrued a financial liability each time they displayed even a snippet of third-party content. It is, I’m certain, a red line which neither platform is prepared to cross, under any circumstances.

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How Google and Facebook’s strategies diverged

Both Google and Facebook (as the company was then called) lobbied hard against the introduction of the code in Australia. After the legislation was passed though, their strategies diverged. Google signed deals with publishers whilst Facebook played hardball, blocking the sharing of news content on its services.

This news blackout was met with strident condemnation from the political leadership of the time, and of course the media. The Australian government, by holding off on designating platforms under the code (and thus placing the regime ready to go but in suspended animation), left itself with some negotiating room. Under intense pressure, Facebook caved after a week, engaged in negotiations with publishers and ultimately signed deals. They did so under a commitment from the government to provide a reprieve on designation whilst details were being worked out.

This episode underlines the political context for big tech-publisher relations in Australia. The extremely high concentration of press ownership had created an environment in which media businesses wield equally-high levels of political influence. Political leaders were, in effect, negotiating on behalf of news outlets.

Fast-forward to today and the politics do not seem to have changed. In response to Meta’s announcement, Prime Minister Albanese and his government have come out fighting. He has threatened to “respond in the national interest”. But knowing how this played out last time, the only lever he really has under the current legislation is to designate. Some are calling for the introduction of a news levy on platforms but this would take time and prove controversial.

Meta will, of course, have expected this and planned for it in its negotiating strategy. It wouldn’t have decided to stop supporting news if it wasn’t also prepared to, again, block publisher content on its platforms. And it wouldn’t have done that if it wasn’t also prepared to hold its line in the face of the inevitable outcry which will follow.

I believe this tells us that, by its own measures, Meta’s effort to decouple its platforms from publisher content has been a success. Today (according to its own stats) news makes up just 3% of what people see on Facebook. That figure in 2021 was much higher; 14.6% of posts viewed on US Facebook feeds included a link to news, or another site. This matters because the utility of its services to users in Australia will not be impacted to the same extent if a news blackout is deployed this time around.

So, at least partially as a result of this change to the value of news to its services, Meta is now prepared to weather the storm of political and media backlash. It knows it is coming and it has chosen this path regardless. That AI is sucking up much of the oxygen in the media-technology public discourse helps, too.

A preparedness to play this hard in Australia tells us that Meta will do so everywhere else.

For UK publishers this means that the payment-for-content provisions in our forthcoming Digital Markets Unit (DMU) regime are unlikely to be effective when it comes to Meta. It would rather block news and face the consequences – which in the UK, particularly under a potential Labour administration which will be frostier to the press, will be markedly less severe than in Australia.

Ultimately Meta cannot be forced to carry news under the UK’s new regime. It can, metaphorically, pick its ball up and take it home. That means blocking the sharing of news across its platforms. The lessons from Australia suggest that news publishers here should be expecting, and planning for, that to happen.

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