Facebook has rejected a call from the Australian government to pay media companies for using their content, saying there is no significant commercial benefit from having news on its platform.
The government had ordered the Australian Competition and Consumer Commission (ACCC) to develop a mandatory code of conduct for Facebook and Google that will force the tech giants to pay media companies for using their content.
In response to a concepts paper released by the competition watchdog, Facebook said it would not affect its revenue if news were not available on its service, The Sydney Morning Herald reported on Monday.
“If there were no news content available on Facebook in Australia, we are confident the impact on Facebook’s community metrics and revenues in Australia would not be significant because news content is highly substitutable and most users do not come to Facebook with the intention of viewing news,” the company said in a response.
The competition watchdog was tasked with creating a “lever-playing field” for the traditional news media which is currently bearing the brunt of Covid-19 pandemic like elsewhere in the world.
Facebook said that the absence of news on Facebook would mean “publishers miss out on the commercial benefits of reaching a wide and diverse audience, and social value would be diminished because news would be harder to access for millions of Australians.”
A spokesperson for Facebook Australia and New Zealand had earlier said that the company was “disappointed” by the Australian government’s announcement.
Facebook has pledged to invest an additional $100 million to support journalists at a time when ad revenues are declining due to the economic impact of the new coronavirus.
The social networking giant said “poorly considered regulation” in Australia could force it to reconsider its investments in local news initiatives and an “unworkable” code could force platforms to reduce access to news.
Facebook reported double-digit growth in Australian advertising revenue last year with $674 million. Google reported $4.3 billion in ad revenue in the country.
A draft mandatory code is scheduled to be released for consultation by July end.
The mandatory code of conduct “will cover issues including the sharing of data, ranking of news content online and the sharing of revenue generated from news”.
It will be enforced through penalties and sanctions and will include a binding dispute resolution process.
“Australia needs a strong and sustainable news media ecosystem and the government recognises the importance of public interest journalism,” Communications Minister Paul Fletcher said earlier.