Here’s how to make Facebook really pay for news

I remember well the morning Meta briefly switched off news content in Australia in 2021 while negotiating with the Morrison government, a scare tactic that spectacularly backfired. I was an administrator of The Conversation’s Facebook page at the time, and I initially panicked as our articles kept failing to post. In blocking them — some of which were from epidemiologists providing vital health information — and other quality sources on a platform already swamped by mis- and disinformation during a deadly pandemic, Meta quickly came off as a ghoulish villain. This emboldened the government to double down on its code and forced Meta to a strategic settlement for public relations’ sake.

Last week, Meta (owner of Facebook and Instagram) announced it does not want to renew its funding deals with Australian news outlets, which it eventually struck voluntarily in 2021 to head off being forced to negotiate under the Morrison government’s news media bargaining code. The big question now is whether the Albanese government will officially designate Meta under the code and force it to the negotiating table. If it does so, many expect Meta will simply remove news content from its platforms, as it has done in Canada to avoid similar legislation.

The code’s design — heavily influenced by News Corp, Seven and other big media players — was always shoddy. And, aside from the brief public shaming effect after Facebook’s own goal, the code never removed the latent possibility that Meta would walk away from news entirely. Its logic was that Meta commercially benefited from having news content on its platforms, and thus should contribute to funding it. This may once have been true, and Meta certainly courted news publishers to use its platforms in the 2010s.

But by 2021, Meta was already turning its back on an industry it had deemed too troublesome. The company now claims news makes up just 3% of people’s feeds. By painting Meta as a leech, the government and media industry were kidding themselves as to how much the platform needed journalism in the long term. Cat videos and photos of your cousin’s wedding would suffice.

The code’s coercive contractualism created another problem: it incentivised clickbait. If Meta was meant to be compensating for the commercial value it extracted from content (as opposed to the public good of journalism), then the biggest contracts ought to go to the news outlets with the most posts and interactions, as this is what Meta monetises. Thus the largest media companies got the biggest deals, and Facebook’s news tab was filled with sensational stories about gruesome crimes and celebrity breakups.

And what about the organisations not covered by Facebook’s deals, such as The Conversation and SBS? What about the independent journalists on Substack? They, of course, weren’t important to the Morrison government — and Meta knew it, so it left them out.

Given these flaws, many are now unsympathetic to the media industry’s pet project. Indeed, some have questioned the code’s whole premise, with nominally left-leaning people making odd bedfellows with Mark Zuckerberg. In Crikey, Bernard Keane asked why the tech giants should be penalised for disrupting the advertising revenues upon which the media once relied, depicting media moguls as “gangsters whose rich target has stopped paying protection money”.

On the ABC, technology reporter James Purtill asked “why should a general-purpose communications service like Facebook have to prop up the news industry?” “It’s a bit like taking mining royalties to fund kindergartens,” QUT professor Axel Bruns told Purtill.

While I agree the code is flawed, I disagree with the notion that media proprietors are simply sore losers. It’s quite normal and justified for governments to make an industry pay for its “negative externalities”. Those who reject such an obligation — “that’s just capitalism” — should be ignored. Unfettered capitalism is bad, and we should regulate it.

Just as factories should be made to pay for their pollution, social media platforms should be made to address the mis- and disinformation their systems proliferate. This should not just entail stricter moderation, but also active investment in quality sources of information, especially when their businesses’ success has made such sources less independently viable.

Frankly, taking money from immensely profitable multinational corporations and directing it towards a public good is desirable, even absent an internal justification. We should take mining revenues to fund kindergartens.

The issue is the code funds the public good of journalism indirectly, via the dubious proxy of commercial value — which was convenient for certain large media outlets, which produce increasingly little “journalism” worthy of the name.

Plus, the Morrison government skipped over the obvious Economics 101 solution to negative externalities — taxes and public expenditure. Where a privatised arbitration system is complicated and inequitable, taxes on revenue are relatively simple and public spending can be targeted to the greatest need.

That’s why, before the code was even on the table, The Conversation’s editor Misha Ketchell (my then-boss) and I made a submission to the Senate inquiry into media diversity calling for “a fund that is arms-length from government to allocate contestable grants for innovative, quality journalism, in a similar manner to the Australia Council for the Arts” to be funded by “a tax levied on digital platforms (Facebook and Google) … should sufficient funds not be available through consolidated revenue”. Lawyer Lizzie O’Shea proposed some similar public-spirited alternatives.

Such a fund could be governed independently and give out grants based on the quality and public value of the proposed journalistic projects, as opposed to the ad revenue they generate for Zuckerberg. And the tech giants couldn’t just avoid their responsibilities by ditching news. The tax would apply regardless of how they generate their revenue.

Indeed, there is an argument for going further and requiring these social platforms to carry news prominently and pay for it. Their significant capture of audience attention alone justifies the imposition of content requirements, in the same manner as TV and radio stations. In Canada, misinformation has flourished on Facebook since news was banned. Meta should not be allowed to shrug off responsibility for such malign uses of its tools.

With the Albanese government looking likely to designate Meta under the code, we will probably go the way of Canada and become a news-free zone on Facebook. This would be Meta’s fault alone — it can well afford to cough up more cash. But the government should not stand idly by, nor carry on with Morrison’s model from sheer path dependency. They ought to go beyond the embattled code and contribute more public funding for what should be, at heart, a public good.

Disclosure: Private Media, the publisher of Crikey, has a news content licensing agreement with Facebook, which will expire following Meta’s funding commitment.