Facebook has pushed back against sharing advertising revenue with Australian media companies, saying it would be able to remove news content from its platform without “significant” impact to its business.
The social media company was responding to the Australian Competition and Consumer Commission’s (ACCC) draft frameworks for a bargaining code to help fix the “imbalance” between digital platforms and news media companies. \
The consumer watchdog was directed by the government to develop a mandatory code ahead of schedule amid the height of the coronavirus pandemic which saw local media companies lose significant advertising revenue.
In its submission to the ACCC, Facebook said asking two private companies to be “solely” responsible for supporting local journalism “is not healthy nor sustainable”.
The social media company highlighted it doesn’t need news content for growth, as shown by changes to its News Feed ranking algorithm in January 2018 which reduced audiences exposure to news stories.
“Notwithstanding this reduction in engagement with news content, the past two years have seen an increase in people engaging on our services and increased revenues, suggesting both that news content is highly substitutable with other content for our users and that news does not drive significant long-term value for our business,” Facebook says in its response to the ACCC.
The social media company released new data on the value it provides publishers, saying its News Feed generated about 2.3 billion organic referrals to Australian news publisher domains from January to May 2020, which it estimates to be worth $195.8 million to the publishers.
Australia-based news publishers also participated in Facebook’s revenue share programs, such as its In-Stream Video advertising program which from January to May 2020 earned publishers about $2.1 million.
Local news publishers also generated about 27 million organic views in News Feed on tagged branded content posts from January through May 2020.
In downplaying the “indirect value” it receives from publishers, Facebook said it could remove all news content without “significant” impact to its metrics and revenues in Australia because news content is “highly substitutable”.
Instead, Facebook proposed a framework that “upholds the primacy of commercial negotiations” between platforms and publishers and the establishment of an Australian Digital News Council to mediate complaints and concerns from publishers, inspired by the Australian Press Council model.
It also backed greater transparency around sharing information on significant changes to its central algorithm, but rejected calls to share more user data with publishers.
Facebook adds the code needs to recognise the “healthy, competitive” rivalry between digital platforms and news publishers.
“Regulatory interventions which impose an excessive cost on one digital advertiser provider in order to subsidise a competitor will inevitably distort advertising markets, potentially leading to higher prices,” the company says.
“It is not reasonable to shift the burden and ask the hundreds of thousands of Australian small businesses who rely on digital advertising — especially in the midst of the coronavirus crisis and economic uncertainty—to bear the cost of subsidising the production of news.”
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