Facebook’s potential news ban already affecting smaller Australian media outlets, inquiry told

<span>The larger news publishers, while also concerned about a news ban, were less worried about any potential for Meta to pull out of Australia entirely.</span><span>Photograph: Reuters</span>
The larger news publishers, while also concerned about a news ban, were less worried about any potential for Meta to pull out of Australia entirely.Photograph: Reuters

Smaller publishers are already feeling the effects of a potential ban on news on Facebook, a parliamentary committee has heard, as news outlets small and large make the case for social media companies to be compelled to pay for news.

Facebook and Instagram’s parent company, Meta, announced in March it would not enter into new agreements with news companies to pay for news, following the end of contracts signed in 2021 under the Morrison government’s news media bargaining code.

The assistant treasurer, Stephen Jones, is considering whether the Albanese government should use the powers under the news media bargaining code laws to “designate” Meta under the code, which would force the tech company to enter negotiations for payment with news providers, or risk fines of 10% of its Australian revenue.

Related: Albanese government could require Meta to carry news on Facebook

News companies told the federal parliament’s joint select committee on social media and Australian society that they fear if Meta is designated, it will remove news from its platform in Australia, similar to moves in Canada in August last year.

The Digital Publishers Alliance chair, Tim Duggan, told the committee that it would be “potentially devastating” for smaller publishers, some of which were getting up to 70% of their traffic from Facebook until Meta changed its algorithm to deprioritise news.

Duggan said that after visiting Canada recently he found it had not had a large effect on bigger publishers who have other revenue streams and brand-name recognition, meaning people visit their websites outside social media.

“But for the smaller end of town, for independent publishers, for those who are reliant on social media and had been courted for years, the impact has been devastating,” he said.

“So I think a news ban would be terrible for not only the industry but also for Australian democracy.”

But he said merely the idea that Meta might ban news in Australia was already being felt by publishers, with advertisers getting nervous.

“We have already seen an impact to some members, of brands and agencies holding back some of their revenue and some of their campaigns in the anticipation that a news ban will come into effect in the next few months,” he said.

“We have advertisers saying we’re concerned about the effect of what a news ban would have and therefore getting nervous and holding back advertising dollars.”

The larger publishers, while also concerned about a news ban, were less worried about any potential for Meta to pull out of Australia entirely.

News Corp Australia chair, Michael Miller, told the committee that new laws were required, and if Meta did not want to “play by the rules” they should be banned “as other companies that don’t want to play by Australian rules and laws can’t operate here”.

He said smaller publishers were in a “very unhealthy relationship” with Meta in particular as an “unavoidable trading partner” to ensure their journalism is discovered.

The Country Press Australia president, Andrew Schreyer, told the committee Meta had shown complete disdain for Australian news media and the government, and should be banned if it refuses to compensate for content.

Duggan said that Meta leaving Australia would only suit the larger publishers, and called for the government to think of an alternative to get news companies compensated.

“The beneficiaries of [Meta leaving Australia] would most likely be larger legacy media, because all that money that flowed into Meta would probably start flowing back into legacy media,” he said.

Meta has previously stated global tech companies cannot resolve the longstanding issues facing the news industry.

Guardian Australia secured funding from both Google and Meta in 2021 following the code being passed into law.