Pushing Meta to the point where the social media giant withdraws news entirely from facebook would be “potentially catastrophic,” according to a confidential submission to competition watchdog the ACCC.
The removal of referrals from Facebook and Instagram, the audience gains from posting on the social media platforms, would result in a loss of about 20% of overall revenue, one digital publisher has told the ACCC, which is currently investigating Meta.
This would come from the direct loss of advertising income, affiliate income and potentially e-commerce sales. This could also mean job losses.
In Canada, Meta blocked news on Facebook and Instagram in response to a new law forcing the big digital platforms to pay publishers for their premium news.
Small digital publishers in Australia, fearing being kicked off the social media platforms by Meta, are urging followers to follow them to other social media platforms.
Men's lifestyle media company Man of Many has a video on Instagram asking "Have you ever been ghosted?" and tells followers "there could be future where Man of Many is blocked entirely from your Facebook or Insta feeds".
In Australia, the big publishers, including News Corp, Seven West media and Nine Entertainment, in receipt of tens of millions of dollars from Meta, are currently engaged in a game of negotiation chicken.
Meta, second in the league of digital advertising platforms in the world, says it won’t renew its agreements to pay local publishers for their news appearing on Facebook.
The publishers have responded by calling on Canberra to use the law, the News Media Bargaining Code, to force payment or face a fine of up to 10% of earnings.
According to financial statements lodged with corporate regulator ASIC, Meta’s Facebook had annual advertising revenue in Australia of $1.25 billion. However, the actual number is greater because the local Meta, acting as a reseller, remits revenue to its parent. The ACCC believes the number is more like $4.7 billion to $5.1 billion.
The federal government has asked competition watchdog the ACCC to determine whether there is a significant bargaining power imbalance between Australian news media companies and Meta in relation to its Facebook and Instagram services.
This is the first step on the road to use the law against Meta. The next would be to “designate” Meta, giving the federal government the power to levy huge fines for failing to negotiate in good faith.
However, the smaller independent digital publishers are telling the ACCC of deep concerns about the operational failure of the News Media Bargaining Code and the potentially catastrophic implications for the Australian media ecosystem.
They argue that designation of Meta, under the News Media Bargaining Code, a first step in taking legal action, would be “potentially catastrophic” for independent publishers in terms of audience reach, given they already are without Meta funding.
“This potential outcome harbours considerable risks for the Australian media landscape, especially for independent publishers like Man of Many,” write Scott Purcell and Frank Arthur, co-founders of Man of Many, in a submission to the ACC.
“The imposition of designation threatens to not only estrange Meta from engaging with Australian news businesses but could also result in a total withdrawal of news content from its platforms.
“This would not only sever an essential channel of distribution and audience engagement for many publishers but also significantly diminish the public's access to a diverse range of news sources.”
The publishers argue there exists a significant imbalance between Meta, and other social media and search platforms, and Australian news businesses, which particularly impacts independent publishers such as Man of Many.
“The platform dominance and unilateral content policies of these platforms, underscore the market imbalance and inequity, thereby limiting the ability of small independent publishers to negotiate,” they say.
“This fundamentally undermines the sustainability of diverse journalism in Australia unless the imbalances are addressed via funding under the Code.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.