Facebook denies responsibility for journalism problems, says ‘virtually zero’ profit in news

Facebook has angrily denied it is the cause of problems for Australia’s news ecosystem, arguing it brings billions of clicks and hundreds of millions of dollars to news outlets, despite “virtually zero” benefit to the company.

“It is essential that the inquiry recognise that Facebook is not
responsible for the challenges facing the Australian news industry,” the social media giant has told a federal Senate inquiry into media diversity.

“Much of the recent debate around digital platforms and news publishers is based on an expectation that two private companies, Facebook and Google, are solely responsible for supporting a public good and solving the challenges faced by the Australian media industry.

“This is not healthy nor sustainable.”

‘Negligible’ revenue in news for Facebook

The federal Parliament is running an inquiry into ‘media diversity in Australia’, which was set up after former prime minister Kevin Rudd’s record-breaking petition calling for a Royal Commission into the issue.

Facebook’s submission to the Senate inquiry argued it is “not responsible” for issues facing media. Photo: AAP

That call wasn’t taken up by either the Coalition or Labor.

Instead, Greens senator Sarah Hanson-Young had a Senate committee set up. That will probe issues around public interest journalism, concentration of media ownership, the impacts of changing business models, and the role of government in supporting journalism.

The committee will also focus on the impact of “online global platforms such as Facebook, Google and Twitter on the media industry and sharing of news” and “the impact of significant changes to media business models since the advent of online news”.

In a submission to the inquiry, Facebook bristled at suggestions its platform was harming the media.

“Only a very small proportion of the content on Facebook is news, and it presents a negligible source of revenue for us. Moreover, news on our services is highly substitutable,” the social media giant said in its submission.

“There has been considerable debate about the value of news to our business. All data points indicate that the commercial value we derive from news content in Australia is virtually zero.”

Facebook claimed it had actually seen increasing revenues and users since changing its News Feed algorithm in 2018 to display less journalism and more content from people’s friends.

Facebook says the media industry has faced problems for years. Photo: Reuters

“The challenges facing the Australian news industry have existed since the commercial phase of the internet began and Australian newspaper circulation began to decline in the 1990s,” it said.

“While the internet may have exacerbated challenges faced by the news industry, those challenges began years before people began widely adopting the internet and decades before the launch of Facebook.”

Facebook complains of ‘unfair’ treatment

The company said it believes that “news is a public good”, and stressed its work in supporting news media in Australia and globally.

Facebook said that support included “tens of millions of dollars” invested into local news, including commissioning Australian news content in new online programs, investing in content from 30 Australian news organisations, and supporting the Walkley Foundation and the Alliance for Journalists’ Freedom.

“The referral traffic we have provided to Australian media publishers from January to November 2020 alone (4.7 billion referrals) has been worth $394 million,” Facebook said, adding it also shared revenue with media outlets.

“From January to late November [2020], Australian publishers generated $5.4 million from our revenue share programs, such as In-Stream Video advertising.”

Facebook claims it sent billions of clicks and millions of dollars to news media. Photo: Getty

Facebook is also in the crosshairs of the Australian Competition and Consumer Commission.

On behalf of the federal government, the consumer watchdog has developed a world-leading bargaining code that would force social media giants to pay media outlets for their work.

As a result, Facebook has threatened to stop displaying news content to Australian users.

In its Senate inquiry submission, Facebook appeared to be unhappy about the constant attention it has been receiving from the federal Parliament.

“The relationship between digital platforms and news publishers has been exhaustively examined in at least five major policy inquiry processes over the last four years,” the company said.

“We therefore respectfully suggest that re-examining well-trodden ground would distract the Senate Standing Committee on Environment and Communications from focusing on an as-yet unexamined issue: concentration within the Australian media sector.”

Indeed, Facebook claimed that focusing on itself and Google would be unfairly helping their business rivals.

“We would encourage the committee to look for proposals to support media diversity beyond just two US companies, which will inevitably give an unfair advantage to Facebook’s competitors in the technology sector, including rivals from countries that propagate different and undesirable visions for the Internet,” Facebook said.

Calls for tax breaks

In other submissions, various news outlets and journalism advocacy bodies called for more support for journalism.

news corp coronavirus

Suggestions included government directly funding news. Photo: AAP

The Media Entertainment and Arts Alliance (MEAA), a union representing journalists, said the government needed to take action and “urgently progress” the news media bargaining code.

The union also called for stricter competition laws to “prevent mergers that lead to more harmful levels of media concentration”, and said the government should consider directly funding local news outlets and the AAP news wire.

“Government assistance should be reset to ensure funding is available for new media,” MEAA suggested.

One submission from News Corp Australia – the original target of Mr Rudd’s petition – called for wide-ranging and urgent reform in areas of freedom of information, access to official information, and defamation law.

The News submission claimed journalists were at risk of criminal penalties under laws that “have very little to do with national security and everything to do with the exercise of power and the desire to avoid scrutiny”.

A submission from a group of seven well-known media identities – including ABC radio host Wendy Harmer, Crikey editor Peter Fray, former editors of the Sydney Morning Herald and The Age, The New Daily columnist Alan Kohler and TND co-founder Bruce Guthrie – suggested giving Australians tax deductions for media subscription fees.

The inquiry is due to table its final report by August.

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