The threat of Meta's 'Armageddon': media companies fear news blackout

Since the middle of last year, Meta - the parent company behind Facebook and Instagram - wiped all news sharing off its platforms. Users over there can't see news articles on their feeds, and can't post them themselves.

"They were gradually blocking things day-by-day, hour-by-hour," Stephen Jeffery, deputy editor of The Hill Times in Ottawa, tells me via video call.

Now, the pages of newspapers, news podcasts, and TV networks - local and from around the world - appear empty for Canadian users, but for single message in a grey box:

"People in Canada can't see this content. In response to Canadian government legislation, news content can't be viewed in Canada."

The move from Meta came in response to new laws that the Canadian government passed last year, designed to force tech giants who circulate news content (and earn the lion's share of online advertising revenue) to come to the table and fairly compensate news companies.

By blocking news across its platforms, Meta avoids being forced to pay for this content under the legislation, and reminds the government who it thinks is really in charge.

It also serves as a living warning to Australians; a crystal ball of what could lie ahead in the coming months, as the Albanese government grapples with the fallout of Meta's announcement last Friday that it won't be renewing its multi-million dollar funding agreements with Australian media companies.

The announcement has set up a fight between Meta and the Australian government, which has the power under the news media bargaining code to "designate" digital platforms and force them to negotiate to pay news businesses.

But it has seen a tension emerge within the domestic media industry, as big players - set to collectively lose a reported $70 million per year in funding deals - urge the government to step in, while smaller, digital outlets fear losing their businesses overnight if Meta decides to block news altogether.

This story - between Meta, the federal government, and the Australian news media industry - really began three years ago, when the then-Morrison government introduced the news media bargaining code.

Facebook responded by suddenly blocking all news on its platform - a sweeping move that also saw the pages of government agencies, charities, and emergency services down for several hours. The blackout only lasted around a week, and Facebook returned to the table (as did Google) to strike a series of commercial deals with news companies.

The code was hailed a success at the time, and went on to inspire Canada's recent legislation.

But as Professor Alfred Hermida, of the University of British Columbia's School of Journalism, Writing and Media, told The Canberra Times, many people "misinterpreted what happened in Australia".

"They thought because Facebook reversed its news ban and because they were giving money to the news industry, the Australian government won," he said.

"They basically avoided being designated by just throwing cash at the problem."

The Australian government has never actually used its powers under the law to "designate" a digital platform. Facebook (and Google, separately) entered private agreements of their own accord to avoid being forced into arbitration - a move that Professor Hermida likened to "paying for the police to turn a blind eye".

"The key thing is these platforms don't want to be legislated in a way that makes them ... liable to pay for their content on their platforms in any sort of way," he said.

"They basically just write cheques, and get the government off [their] backs."

The legislation may finally be put to the test, though.

On March 1 - hours after Meta announced it wouldn't renew these commercial contracts and would shut down the Facebook News bookmark on the platform - Assistant Treasurer Stephen Jones, standing alongside Communications Minister Michelle Rowland, said the government would "be taking all of the steps available to it under the news media bargaining code".

"We're not talking about some plucky little start-up here - we're talking about one of the world's largest and most profitable companies," Mr Jones said.

Major news organisations have spent the last week publicly pushing for the Albanese government to step in and force Meta's hand.

For companies like Nine Entertainment, News Corp and Seven West Media, the stakes are high. The Australian Financial Review reported that these companies are estimated to lose between 5 and 9 per cent of their net profit each year if Meta's deals don't continue. ACM boss Antony Catalano - the publisher of this masthead - publicly said there will "absolutely" be job losses at the company if alternative funding isn't found.

But other voices have emerged from within the industry. Smaller digital publishers, who have built their businesses on or via Meta's platforms, are urging caution.

Meta has refused to wade into whether it will pull all news content in Australia if "designated", with a spokesperson telling ACM that "we're not going to comment on hypothetical situations".

"There is no change to publishers' ability to use Facebook and they can continue to benefit from our free tools and products which they can voluntarily use should they want to," a Meta spokesperson said.

Even so, the Digital Publishers Alliance - a group representing small, independent media companies - has been in conversations with the government this week, asking it to look to Canada when considering the implications of "designation".

"Facebook has spent decades courting the media industry to get us to create content on Facebook and Instagram through video, through words, through posting links," the group's chair, Tim Duggan, told The Canberra Times.

"To turn off that overnight is a potentially devastating blow to smaller and independent publishers. So the reality of designation is disproportionately worse for smaller publishers than large ones."

The Daily Aus is one such publisher. With more than 500,000 Instagram followers, it runs the second-biggest news account in the country, and has built its business by breaking down the day's news on the platform through informative videos and colourful carousels.

While its offering has expanded to include podcasts and a newsletter, co-founder Zara Seidler says Meta blocking all news content would "have a direct impact on our revenue".

"It's extremely hard to be an independent publisher in this country. And the code - whether or not that was an unintended consequence - all it did was entrench those dynamics," Ms Seidler said.

"And there have been tensions since that came around because big players have continued to succeed and continued to be funded, while smaller players who often times are bringing more traffic to Meta or Google are not being recognised in that way.

"I don't blame legacy media for wanting to call for designation. But I think our voices and the voices of other independent publishers need to be heard so that it's clear what the unintended consequences of that could be, and especially from a consumer point of view. I don't know that is really cutting through."

Ms Seidler is also concerned about what a possible news blackout on two of the biggest social media platforms in the country could do for Australian democracy.

"I think that all we'll see is this vacuum created where creators and influencers share their opinions and there is nothing that is fact-based or evidence-based to counteract those sometimes illegitimate views, and young people will stay there. They won't go elsewhere," she said.

Despite encouraging the government to explore its options under the code last week, News Corp Australia's executive chairman Michael Miller agreed that Meta banning news content altogether would be "an Armageddon outcome".

He told The Canberra Times it was "critical our Parliament continues to protect Australians from that scenario".

"Have no doubt, this journalism will be replaced by a flood of fake news; news which is unverified, unauthored, untrusted, containing misleading information which will result in Australians making poor decisions," Mr Miller said.

For Meta, though, there appear to be few consequences to them wiping news off their platforms.

In an online statement announcing its decision to not renew its deals with Australian media companies, Meta wrote news already makes up less than what 3 per cent of people globally see in their Facebook feeds.

Mr Jeffrey said that, while he has noticed less news on his Facebook feed, the move doesn't appear to have changed the number of people using the site.

"They are now using what they're doing in Canada as an example for the rest of the world," he said.

"They've shown that they can do this without affecting their bottom line too much."

Canada has a population of around 40 million people. Australia is even smaller, with around just 25 million.

These countries have relatively little market power with which they can threaten Meta. The tech giant, on the other hand, has a lot to lose if it shows global powers - the United States for example - how easily it will bend to the demands of our governments.

"Individually, Meta's picking off Australia, picking off Canada because they can do that. They can win these local fights," Professor Hermida said.

"It sets a precedent. They don't want to have a position where they're obliged to pay for the content that other organisations are posting on their platforms."

The question for the Albanese government now is: how do you regulate a powerful global corporation when the consequences are high, and the strength of your bargaining power is, arguably, questionable.

An option is to unionise; have governments work together to collectively hold Meta to universal standards.

"Definitely one approach is saying that this is a global issue. That has different expressions at a national level, but it's a global question," Professor Hermida said.

Another idea, Professor Hermida suggested, is to levy the tax on digital advertising on these platforms and use that to support the media industry.

"You disentangle the paying for news aspect from the funding and say: if Google and Meta have 75 per cent of the digital advertising market, we'll just ... tax it at this percentage and that money is designated for the news industry," he said.

Rod Sims, former Australian Competition and Consumer Commission chair and one of the key architects of the news media bargaining code, also told this masthead earlier in the week that the Albanese government should look beyond the code to other legislation they can introduce or amend to regulate the tech giant.

"We need to do more thinking and, of course, it's up to the executive of the day to decide what to put before Parliament ... but we can't run a country being scared of large international companies that put profit before all else," he said.