Facebook to invest US$1bn in news content over 3 years after Australia furore

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Facebook plans to spend at least US$1 billion over the next three years to licence content from news publishers, and this comes shortly after the furore it caused in Australia when it restricted publishers and Australian consumers from sharing or viewing Australian and international news content. The tech giant made a U-turn on its decision on 23 February after it reached an agreement with the Australian government.

Nick Clegg, Facebook's VP of global affairs, said in a blog post that the latest investment is in addition to the US$600 million which it has paid since 2018 in deals with publishers including The Guardian, Telegraph Media Group, Financial Times, Daily Mail Group, and Sky News, among others, for Facebook News in the UK.

Facebook's latest move is similar to Google's US$1 billion investment in news partnerships announced last year, which seeks to support the industry and the future of news. CEO Sundar Pichai said previously that the financial commitment is the biggest to date and pays publishers to create and curate high-quality content for a different kind of online news experience. In recent times, Facebook and Google have come under scrutiny from governments worldwide regarding compensating publishers for content that appears on their platforms.

Separately, Google recently entered into a three-year global partnership with News Corp to feature its publications on Google News Showcase in return for "significant payments by Google". The agreement also includes the development of a subscription platform, the sharing of ad revenue via Google’s ad technology services, the cultivation of audio journalism and meaningful investments in innovative video journalism by YouTube

Just this morning, the Australian government passed a new law to compel Google and Facebook to pay publishers for content used on their platforms. Reuters reported that Australia will be the first country where a government arbitrator has the authority to decide on the price to be paid by tech giants should commercial discussions with local news publishers fall through.

Changes were made to the legislation at the eleventh hour after the recent suspension of news by Facebook. On 23 February, multiple media outlets including the Wall Street Journal reported that Facebook managed to secure some changes to the legislation as part of the deal. The amended legislation requires an additional round of negotiation with publishers before the Media Bargaining Code comes into effect, and more acknowledgement of deals that Facebook inks on its own accord with publishers.

Clegg said in the blog post that the proposed Australian law would have forced Facebook to "pay potentially unlimited amounts of money to multi-national media conglomerates under an arbitration system that deliberately misdescribes the relationship between publishers and Facebook, without even so much as a guarantee that it is used to pay for journalism, let alone support smaller publishers".

"It is like forcing car makers to fund radio stations because people might listen to them in the car and letting the stations set the price," he said. Clegg added it is ironic that some of the biggest publishers that have long advocated for free markets and voluntary commercial undertakings now appear to be in favor of state sponsored price setting. "The events in Australia show the danger of camouflaging a bid for cash subsidies behind distortions about how the internet works," he added.

Many news publishers worldwide, including those in Malaysia, have also spoken out against tech giants benefiting from their content without paying for it. Meanwhile, countries such as Canada and France are also looking at similar laws Australia has passed.

Photo courtesy: 123RF

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