Punishing Meta for withdrawing funding for news in Australia might do more harm than good, according to a federal parliamentary inquiry.
An interim report from the Joint Select Committee on Social Media and Australian Society recommends a Digital Affairs Ministry with responsibility for the coordination of regulation to address the challenges and risks presented by digital platforms.
The News Media Bargaining Code, which was designed to force digital platforms to pay Australian publishers for news, was “broken” and should be replaced with alternative revenue mechanisms, such as a levy system,
“Given Meta's decision not to renew deals under the News Media Bargaining Code, and the de-prioritisation of news on Meta platforms, the committee recommends that the Australian Government establish a short-term transition fund to help news media businesses to diversify and strengthen alternative income streams and news product offerings,” according to the interim report. .
“The fund should have a particular focus on supporting small, independent and digital only publishers, as well as those operating in underserved communities and rural, regional and remote areas.”
The inquiry notes that Meta claims that news accounts for an ever-decreasing portion of its content, and that it is not necessary to carry it at all.
“The committee heard compelling evidence from digital publishers that designation (to force payment to publishers) might not only be ineffective but might also do harm to Australian society if platforms, particularly Meta, block news altogether thereby depriving users from the carriage of news media, which plays a crucial role in underpinning democratic society,” the inquiry report said.
“To ensure that access to news remains a key element of users' consumption of media, the committee supports further exploration of 'must carry' requirements to social media platforms. This further exploration should include an assessment of any legal or regulatory barriers to such a requirement.”
Inquiry deputy chair Sarah Hanson-Young, a Greens senator, said reform and new regulations are urgently needed to hold big corporations accountable.
“Global giants like Meta continue to operate in Australia and benefit off Australian communities, yet will stop at nothing to ensure they do not have to adhere to Australian laws or give anything back to those they profit off, be it users, journalists or content creators,” she said.
“Almost half of Australians use social media to access news, and two-thirds of Gen Z rely on social media as their main news source… the potential for Meta to remove news from their platforms will create a void for mis and disinformation.
“Regulating cowboys like Meta and X is a problem being grappled with globally, with these corporations fighting tooth and nail to protect their profits while throwing user safety under the bus.
“The Australian Parliament must have the courage to target big tech where it hurts—their predatory business models that profit off selling Australian users' data, using it to train AI without user consent, and exploiting users' privacy… they cannot be left beyond the law.”
The parliamentary inquiry was established in May to report on the influence and impacts of social media on Australian society.
The committee held nine public hearings and heard evidence from organisations including Nine Entertainment, News Corp Australia, Seven West Media, Australian Community Media and the office of the eSafety Commissioner.
The inquiry examined issues such as age verification, online safety, algorithms and recommender systems, the impacts of the mental health of users, lack of accountability of social media platforms and the privacy and data issues inherent in using social media.
According to the Australians for a Murdoch Royal Commission (AMRC), the rise of digital platforms has seen traditional media outlets lose control of content distribution, instead becoming reliant on web traffic and social media algorithms.
Nicholas Shelton, from Broadsheet Media, told the inquiry that this allowed platforms such as Meta to take control of the economics of internet content.
“They do that very effectively, and when you control the distribution you control the commerce and you control the economics,” he said.
“That's what they've done so effectively. Now they've decided they don't need us anymore, so they're happy to shut the door.”
Meanwhile, the Local and Independent News Association (LINA) said Facebook and Instagram provide new ways to engage with target audiences, reach particular communities more quickly, and gather story leads and community feedback.
However, Mark Sneesby, CEO of Nine Entertainment, told the inquiry that digital platforms have become unavoidable trading partners for news media outlets.
“Over a number of years, Meta has used the content from media organisations to build a scale audience reaching most of the Australian population, creating that unavoidable business partner and a dependency on that distribution channel by media businesses,” he said.
The committee is due to present its final report on November 18.
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