February 17, 2021 began a week that still lives in infamy for many Australian news publishers. In a stand-off with the government over the news media bargaining code, Facebook suddenly banned Australian media content its platform, throwing parts of the industry into turmoil amid a global pandemic and raging bushfires.

The move not only blocked news links for Australians, it banned users globally from reading any Australian news, while also removing Facebook pages for hospitals, charities, emergency services and even the government.

After less than a week the company changed tack, and it went to make agreements to pay Australian publishers for their content.

But after tech giant Meta’s recent move not to renew these commercial deals with local publishers, it looks increasingly likely that we could be returning to a world where Australian Facebook and Instagram feeds do not include news.

Any repeat of a news ban now will have far deeper consequences, which will ripple through the publishing industry and broader society.

The Canadian experience

Canada’s last six months serve as a case in point. News remains banned on Facebook in Canada, after that country passed similar legislation to Australia’s news bargaining code in June last year.

Chatting to Canadians helps inform what we could expect here. Their view is that Facebook has become more toxic – and more dominated by misinformation – than they anticipated.

Canadian businessman Michael Wood, who lives in capital city Ottawa, has felt the impact of a newsless Facebook over the past six months. He says you can feel it most acutely in the dearth of local news.

“Should someone be highlighted in the media for doing amazing things, it cannot be shared,” he says. “People are taking screenshots of the articles and posting the details as photos … But it’s not the same.

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“Should someone in our community go missing or have a crime incident nearby, many would share articles to assist in creating more awareness.”

Quebec University journalism professor Jean-Hugues Roy, who in 2022 had modelled the effects of a Facebook news ban, told The Guardian this month: “A real-world, newsless Facebook turns out to be more toxic than I had anticipated.”

Figures from Reuters show that Canada’s news ban has not affected time spent on Facebook or its number of daily active users, which remain largely unchanged.

Alice Dawkins, executive director at digital lobby group for online safety, Reset Australia, said the Canadian experience should prepare us for a sharp rise in low-quality content.

“It’s necessary to examine the likely fallout from the news issue in context of Australia’s demonstrably weak platform transparency landscape … Neither the Australian public nor regulators can access sufficiently reliable data on usage metrics for Facebook here. We are left with only Meta’s untested and practically untestable claims,” she said.

“We’re also seeing attacks on the fact-checking industry paired with recent confirmation from Meta that they take an extremely narrow approach to labelling fact-checked misinformation on the Facebook platform.

“It’s almost like Meta is facilitating a perfect storm for information insecurity.”

Impact on local publishers

Australian publishers are now grappling with the possibility of Facebook pulling the pin on news in this market, as the government also assesses its first move.

The news bargaining code, a world first, was designed to have large tech giants compensate local publishers for content, and address a perceived power imbalance between Australian news businesses and the US-based platforms.

While widely seen as an imperfect solution to a complex problem, the code was always supposed to be a “backstop”, according to its architect, former Australian Competition and Consumer Commission (ACCC) chair Rod Sims.

Put as simply as possible, the code would require stakeholders – publishers and tech giants – to agree on a dollar value on the news content distributed by the platforms. The platforms would then pay that revenue to registered publishers, and the parties would go through a final arbitration if they couldn’t agree on the dollar value.

That process would only happen if Meta or Google was “designated” by the government, which could be avoided if they signed commercial deals with news publishers first. And for a while, it worked.

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After the initial dummy spit in February 2021, Facebook and Instagram owner Meta signed 13 commercial deals with media companies worth a collective $66 million per year, and Google also signed commercial deals. Newsrooms across the country went on a hiring spree of sorts – a welcome flurry of activity after years of lay-offs and redundancies.

There was always a perception, however, that Google generally acted in good faith, particularly because news is a core part of the Google platform, while Meta was dragged kicking and screaming into the process.

And publishers are now bracing for the worst, after Meta last month said it would let its deals expire.

Tim Duggan, chair of the Digital Publishers Alliance, says a Meta news ban would be devastating for smaller and independent publishers that he represents. He’s been meeting with members of the government in an attempt to avoid a Meta designation, which he thinks will likely cause it to walk away from news entirely, and therefore decimate publisher revenues.

Many digital publishers have been courted and encouraged by Meta over many years to build content and products specifically on their platforms, according to Duggan.

“For them to turn around and essentially threaten to remove all of that overnight just goes to demonstrate the power imbalance they have in the market that the News Media Code was trying to address in the first place.”

The DPA recently asked its members to quantify the potential impact to their revenue if a news ban came into effect.

Twenty publishers participated, and calculated that an average of 40 per cent of their revenue was at risk from a Meta news ban, ranging from no effect for publishers who aren’t reliant on Meta at all, to up to 80 per cent for some publishers who have effectively built their businesses on Facebook and Instagram.

For a publisher to lose 80 per cent of its revenue would mean significant lay-offs and a reduction in output.

“An outcome even close to this would be a real setback in our need to have a more diverse media ecosystem,” Duggan says.

“Of course, every private business has the right to choose which areas to focus on and which to retreat from, but it’s the scale and whiplashing way that Meta has gone about wooing and then potentially banning news. Just a few years ago, the Facebook Journalism Project pledged to spend US$300 million a year on journalism, and now it’s threatening to block any form of journalism for Australians on its platforms if it doesn’t agree with the government’s rules of how companies should operate in this market.”

Duggan says that most publishers have been trying to wean themselves of Facebook for years, with some success, but the member survey still showed the platform was responsible for an average of 20 per cent of digital publishers’ referral traffic.

“For most publishers the biggest pain point of a news ban will be felt on Instagram,” he says. “It has been a very successful channel to drive new growth in audience and revenue … Most publishers are attempting to move their audiences and revenue to owned channels like newsletters and podcasts, but that takes a long time.”

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Scott Purcell didn’t receive any of Meta’s money. Purcell is the co-founder of Man of Many, which describes itself as Australia’s largest men’s lifestyle website. Man of Many has already been working to wean itself off Facebook traffic and diversify its audience streams.

Purcell says the code was poorly designed from the get-go: that it entrenched the market power of the likes of News Corp and Nine – publisher of this masthead – who would still have strong readership, no matter what Facebook did.

“I didn’t agree with the premise of the News Media Bargaining Code in the first place,” he says. “It doesn’t recognise the true nature of the value exchange between publishers and platforms. We believe that while the code aims to address the power imbalances between digital platforms and news businesses, it inadvertently risks significant unintended consequences that could detrimentally reshape the media landscape.”

If Facebook abandons news it would exacerbate the issues caused by the large publishers’ market power, according to Purcell. Even so, the strong reaction from the large publishers suggests they are also worried about the potential hit to their revenue.

Peter Costello, chairman of this masthead’s publisher, Nine, warned in early March that Meta’s move had prompted an “existential moment” for media companies, while News Corp Australia executive chair Michael Miller has warned the decision will probably lead to job cuts.

“With less revenue coming into the industry you would have to assume that the industry will have to suffer some losses, and the main area would be people,” Miller said in early March.

A spokesman for the competition watchdog said the ACCC remains of the view that access to public interest journalism is essential for Australians and “it is concerning this information will no longer be available on this service.”

“We have been requested to work with the relevant stakeholders and have commenced voluntary information gathering to inform our advice to the assistant treasurer,” the spokesman said.

Communications minister Michelle Rowland and Assistant Treasurer Stephen Jones, meanwhile, are mulling what to do next with tech giant Meta – which could face fines of up to $1 billion.

Rowland and Jones say the government is still considering whether to “designate” Meta under the terms of the News Media Bargaining Code, laws that passed in 2021 designed to force it and Google to compensate publishers for news, or face fines of 10 per cent of annual local revenue.

Heading towards irrelevance?

Despite the concern about Facebook’s potential news ban, others posit that the platform was already heading towards irrelevance, and that removing news would just accelerate that trend.

Sharon Williams, founder of Taurus Marketing, works with CEOs and billionaires on their marketing and personal brands. She thinks we shouldn’t care too much about Facebook removing news – that the alliance between publishers and Facebook was never going to last.

“Facebook has already faded into irrelevance other than for school reunions and Marketplace,” she says. “It really isn’t a mainstream social media channel any more.

“I think it will fade away, and I also think users are sceptical of it … The solution is don’t invest in Facebook. It’s a dying, unfashionable platform with a growing brand for fake news. It’s almost returning to its roots as a high school networking app, and I actually find the content quite frightening and misleading.”

For its part, Meta, which is led by founder and chief executive Mark Zuckerberg, says that news makes up less than 3 per cent of content on its users’ news feeds – a statistic disputed by publishers – and that as a content type on Facebook, news is highly substitutable.

When contacted for comment, Meta referred to a recent blog post: “It’s been well-documented that the traditional news industry and sustainability of public interest journalism has faced challenges over the past two decades,” it said in the post.

“But forcing technology companies into commercial relationships will not solve the long-term challenges facing public-interest journalism or encourage the news industry to develop sustainable business models. We’ve been consistent in sharing that we don’t believe the News Media Bargaining Code framework fixes the long-standing issues facing the news industry.”

Duggan, however, remains worried, and says while he is concerned about what a news ban would mean for publishers, he’s equally concerned about the longer-term impact on the Australian public.

“Can you imagine a social media landscape full of unverified information, influencers peddling lies and no ability for people to know if they can ever trust anything again they see as they are scrolling?

“That’s a likely outcome from Meta breaking up with the Australian news industry.”

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