Meta Platforms said it will stop paying Australian news publishers for content that appears on Facebook, setting up a fresh battle with Canberra which had led the world with a law that forces internet giants to strike licensing deals.

News publishers and governments like Australia have argued that Facebook and Google unfairly benefit in terms of advertising revenue when links to news articles appear on their platforms. Meta has been scaling back its promotion of news and political content to drive traffic and says news links are now a fraction of users’ feeds.

Meta will discontinue a tab on Facebook which promotes news in Australia and the US, it said in a statement, adding that it cancelled the news tab last year in the UK, France and Germany.

As a result, “we will not enter into new commercial deals for traditional news content in these countries and will not offer new Facebook products specifically for news publishers”, the statement added.

The decision pits Meta against the Australian government and its 2021 law.

“The idea that one company can profit from others’ investment, not just investment in capital but investment in people, investment in journalism, is unfair,” Prime Minister Anthony Albanese told reporters. “That’s not the Australian way.”

The government is seeking advice from the treasury department and the Australian Competition and Consumer Commission (ACCC) about its next steps.

Rod Sims, the former ACCC chair who oversaw the design of the law, called Meta’s reversal selfish and he was concerned about the impact on society as the decision undermined the quality of journalism which appears on social media. “This is Meta thumbing its nose at the Australian parliament,” he said.

Not obligated

Under the 2021 law, the country’s government must decide whether it will appoint a mediator to set Meta’s fees and potentially fine the company if it fails to cooperate. Most of Meta’s deals with Australian media ran for three years and are set to expire in 2024.

Meta is, however, not obligated to pay news publishers if it blocks users from reposting news articles as it did briefly in 2021. It has done the same in Canada since 2023 when the country passed similar laws. Meta said on Friday that publishers could continue posting news content on Facebook.

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Tama Leaver, an internet studies professor at Curtin University, said Meta will be reluctant to escalate the dispute by stopping its users from posting news links in Australia and will more likely challenge the government in court if it intervenes.

“Meta is going ,’What are you going to do?’, and the Australian government has a real decision to make,” he said.

Australia’s biggest media outlets lambasted the decision, calling it an attack on the industry.

“Meta is using its immense market power to refuse to negotiate, and the government is right to explore every option for how the Media Bargaining Code’s powers can be used,” said News Corp Australasia executive chairman Michael Miller.

Nine Entertainment CEO Mike Sneesby said the decision failed to acknowledge the value that the media firm, which owns the Sydney Morning Herald and Australian Financial Review mastheads and a free-to-air television channel, created for Meta.

While no deal values have been disclosed, Australian media outlets have reported Facebook’s deals are worth A$70-million (R865-million) a year to the industry.

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Google’s Australian media licensing deals mostly ran for five years, expiring in 2026. A spokesman said the company has already started negotiations for deal renewals.

Many governments around the world remain keen on protecting their local news industries from being elbowed out of the online advertising market. Indonesia said last month it also plans to make large tech firms pay for news content. — Byron Kaye, Lewis Jackson and Alasdair Pal, (c) 2024 Reuters