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Facebook refuses to share ad revenue with Australia news orgs, says news content is “highly substitutable”: Report

Facebook has said that pulling news sharing from the platform would not significantly impact its business while maintaining that there it shares a ‘healthy rivalry’ with news organisations, reported The Guardian. It rejected Australia’s anti-trust regulator’s proposal to share ad revenue with news organisations.

The Australian Competition and Consumer Commission has been tasked with developing a mandatory code of conduct to address commercial arrangements between digital platforms and news media businesses to help create a level playing field. Facebook said it supported the idea of a code, but said that Google and itself were being singled out unfairly.

News is highly substitutable, Facebook says: Facebook explained that a change in its News Feed ranking algorithm in January 2018 reduced views of public content from all pages, including news. Even so, it has seen 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”. “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.”

Facebook proposes mediating council instead: Instead of the regulator’s proposal to create a body with powers to impose penalties and binding dispute resolution, Facebook has proposed creating an “Australian Digital News Council” to mediate complaints from news organisations, based on the Australian Press Council as a model.

Australia treasurer Josh Frydenberg had stated in April that “it is only fair that the search engines and social media giants pay for the original news content that they use to drive traffic to their sites”. In its final report, the ACCC had identified that Facebook and Google have each become unavoidable trading partners for Australian news media businesses in reaching audiences online, resulting in an imbalance in bargaining power.

What the mandatory code will address: The code — to be developed by Australian Competition and Consumer Commission (ACCC) — will cover sharing of data, transparency of ranking algorithms and display of news content, and the monetisation and the sharing of revenue generated from the news. The mandatory code will also:

  • Establish appropriate enforcement, penalty, and binding dispute resolution mechanisms.
  • Define news content that will be covered, and will cover services such as Instagram and Twitter.

A draft mandatory code will be released for consultation by the end of July.

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