Social media giant Facebook has refused to share advertisement revenues generated from its social media platforms, ignoring the calls from both the Australian government and news companies about sharing advertising revenue with the media. Facebook has instead suggested that it would cut down news content from its platform rather than sharing of revenues.
In an average user’s news feed, news represented a “very small fraction” of the content, said the United States based technology giant in a submission to Australia’s competition watchdog. “If there were no news content available on Facebook in Australia, we are confident the impact on Facebook’s community metrics and revenues in Australia would not be significant,” it said in a thinly veiled threat to boycott local news companies.
“Given the social value and benefit to news publishers, we would strongly prefer to continue enabling news publishers’ content to be available on our platform,” it said.
Measures are set to be imposed by the Australian government that reportedly will force online giants like Facebook and Google to share the revenues that they generate from their platforms by displaying news content on the services or platforms offered by them. This move is also being closely watched by regulators and government all across the world.
Australia’s two biggest media companies, Rupert Murdoch’s News Corp and Nine Entertainment, have reportedly provided strong backing to the government’s this initiative.
The media outlets argue that Google, Facebook and other large tech firms are to be blamed for the current crisis roiling the news industry globally as these tech companies have been able to capture the vast majority of online advertising revenues but has not provided any fair compensation to the media companies whose new content the companies take and place advertisements on such content.
Cutbacks and bankruptcies across the sector have been forced because of the loss of advertising dollars that previously flowed to newspapers. That process has been compounded by the current economic situation caused by the novel coronavirus pandemic.
Major cuts in editorial staff have been announced by News Corp, Nine and other media in Australia. On the other hand, more than 170 newsrooms and newspapers have either suspended or closed down their operations within the last few years.
About 6 billion Australian dollars ($4 billion) a year from advertising in the country flows into the accounts of Google and Facebook together, according to an estimate of Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC). Demands that the two online tech companies share at least 10 percent of that money each year to local news organizations have been made by leading news publishers in Australia.
The demand was rejected last month by Google as the company said that news-linked advertising generated barely $10 million Australian dollars a year for the company.
The stance taken by the two companies do not auger well for negotiations that the ACCC wants to organize between the two tech companies and the Australian media companies about the implementation of a “code of conduct” that would decide on issues such as revenue sharing, disinformation, data sharing and protecting user privacy.
(Adapted from AlJazeera.com)