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Meta Claims Aussie Media Misused Funds To Pay Debt, Shareholders

One of Facebook’s top execs has claimed Australian news outlets are using money gained in media bargaining agreements to reward shareholders and pay debts.

John Severinson, head of partner development at Meta, said the new laws don’t incentivise collaboration and don’t solve the broken business model that online journalism operates under.

“The government should encourage the development of new business models. One of the learnings from Australia is that it doesn’t solve – or attempt to solve – the underlying issue in that the business model of journalism online is broken and needs to transition to a new reality,” Severinson said.

“We can see the agreements that we have closed with publishers in Australia following all the events over there, some of these publishers have used this money instead to pay down debt or give it to shareholders. It doesn’t incentivise collaboration, and we think smart regulation should do that.”

These comments were made as part of an inquiry into local journalism by the House of Commons in the UK.

Both companies are pushing against the wider adoption of these laws, introduced last February in Australia in a move to force Google and Facebook to pay media outlets whose articles they display in their newsfeeds and search engines. According to the ACMA, this is to address bargaining power imbalances between digital platforms and Australian news businesses.

As it stands, both companies were able to gain exemptions from the law, as long as they negotiate commercial deals with each news publishers to use their content.

If they renege or refuse to enter into agreements, they will be ‘designated’ under the code, and legally required to enter negotiations with publishers or face fines of 10 per cent of Australian revenue.

This new criticism from the tech giants comes as Australian Treasury prepares to scrutinise the framework in a series of roundtables.

Tom Morrison-Bell, Google’s government affairs and public policy manager, said the code is confusing for all involved.

“Nobody has been designated under the code yet, that code has not come into force. Nobody knows how that law works,” Morrison-Bell said.

“We worked constructively with the government to find a way forward.”

Google and Facebook have both negotiated deals with News Corp, Nine, Seven West, Guardian Australia, the ABC, Australian Country Media, Junkee, and Schwartz Media – publisher of The Saturday Paper.

Google has also signed a deal with SBS, negotiations Facebook has refused to enter into.

Former ACCC chair Rod Sims told the AFR last year that he feels Facebook should be ‘designated’ under the code, and forced to strike such a deal.

“Many small companies have got deals and Google is continuing to do deals – it has done deals with SBS and The Conversation. Facebook has not. So if Facebook has drawn a line on deals in a way that you don’t do a deal with SBS, how does that work?

“You’ve done a deal with the ABC, and you haven’t done a deal with SBS? Talk about diversity – SBS is the embodiment of diversity.

“It’s a very, very strange place to draw the line and I think that will increasingly be focused on.”



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