Facebook has pledged at least $1bn to pay for news over the next three years, matching Google’s spending plans in a move that aims to contain the fallout from the social media group’s shortlived ban on news in Australia.
Nick Clegg, Facebook’s vice-president of global affairs, disclosed the budget in a post defending last week’s decision to temporarily restrict Australian news because of a draft law that would have allowed big media firms to demand a “blank check” from the platform.
“Many people are rightly asking: what on Earth was all that about?” wrote Clegg in a Facebook post. “At the heart of it, in Facebook’s view, is a fundamental misunderstanding of the relationship between Facebook and news publishers.”
The $2bn in total funding from Google and Facebook reflects the significant shift in commercial power towards struggling news groups. But it remains unclear whether the sums will satisfy publishers’ growing demands, or avoid potentially more costly action by regulators around the world.
Facebook on Monday agreed to restore news in Australia after the government proposed amendments to a draft bill, which sought to make Big Tech pay for news by dramatically bolstering the bargaining power of publishers.
“It is understandable that some media conglomerates see Facebook as a potential source of money to make up for their losses,” Clegg wrote. “But does that mean they should be able to demand a blank check? That’s what the Australian law, as it was proposed, would have done.”
Facebook’s abrupt decision to block the sharing of news in Australia caused a public backlash, especially after access to critical emergency services and health pages was mistakenly cut off.
Clegg said it was “legally necessary” for the ban to be imposed before the legislation came into force, so Facebook “erred on the side of over-enforcement”.
“In doing so, some content was blocked inadvertently. Much of this was, thankfully, reversed quickly,” he wrote.
Facebook has in the past said news brings “negligible” value to its platform. But against the backdrop of threats to tighten regulation, both Google and Facebook over the past three years started paying some publishers for news content, together reaching deals in more than a dozen countries. Clegg said Facebook spent $600m on news since 2018.
But the negotiated value of these publishers rose sharply in Australia as the government pushed reforms that granted media groups the right to seek binding arbitration in disputes with Facebook or Google.
Most significantly, Google last week agreed a deal with Rupert Murdoch’s News Corp, Australia’s biggest publisher, for an undisclosed amount.
While Google last year pledged to spend $1bn on news over three years, Facebook has never before committed to spending a specific sum. The Financial Times has reached commercial deals with both Facebook and Google.