Meta unfriends news media in growing rift with publishers

Meta is shunning the news business, giving lower priority to current affairs and politics on its social media platforms while refusing to engage with efforts from governments to make the US tech giant pay more to media organisations.

Facebook’s parent company, after years of attempting to placate powerful publishers by funding non-profit journalism projects and striking deals with groups such as Rupert Murdoch’s News Corp, is toughening its stance towards the sector, according to people familiar with the company’s strategies.

Meta’s latest snub came this month when the company launched Threads, a text-based app to challenge its struggling rival Twitter. Threads drew in 100 million users within a record five days of launch, linking profiles to existing accounts on Meta’s popular photo-sharing app Instagram.

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The Instagram algorithm, which prioritises content posted by creators and friends over hard news or politics, has largely been replicated in Threads, according to two people familiar with the move. Instagram chief Adam Mosseri said it was “not going to do anything to encourage” news on the platform.

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Meta is in a stand-off with Canada’s government, having said it would cull news from its feeds in the region shortly, as legislation comes into force mandating platforms to pay publishers and broadcasters for their content.

The law was designed to boost the fortunes of smaller news groups with less negotiating power. It is also targeted at Google, which said it would bring in a news blackout. Canadian publishers that already had content licensing agreements with Meta have been told those deals will be terminated by the beginning of August, according to two people with knowledge of the move.

Meta briefly pulled news from Facebook in Australia in 2021 after a similar dispute, prompting critics to accuse it of using its power to undermine a sovereign nation.

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More than 30 advertisers in Canada – including the federal, Quebec and British Columbia governments – say they will pull advertising in protest at the move, said Paul Deegan, chief executive of trade association News Media Canada. Canada accounted for about $3 billion (€2.7 billion) of Meta’s $117 billion annual revenues in 2022, according to regulatory filings.

“The company is running the very real risk of losing more in revenue than they would pay news businesses under the Online News Act,” Deegan said, adding that he expected other advertisers to follow in the coming weeks.

“We’re going to hit a tipping point where the decision to ‘unfriend’ Canada is going to be bad for users, bad for shareholders, and bad for Meta’s reputation globally,” he said.

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Meta has at times sought to court publishers, with brief initiatives around video clips, for example, or, in 2019, with deals for content to run on the Facebook News Tab product.

However, its senior executives have concluded there is a clash of interests with the news industry, with the growth of the social media giant’s digital advertising business resented as one of the reasons for a global decline in revenues at newspaper groups.

According to people familiar with the shift in strategy, Meta found that its three billion users prefer short-form videos and content from influencers over news and politics. From 2021 it began reducing the amount of political content in users’ feeds.

Research commissioned by Meta and published in March found that posts linked to current events accounted for less than 3 per cent of people’s Facebook feeds. About a fifth of users in the US, UK and Canada consider that “too much” news.

Meta is assessing whether the legislation would compel it to also remove news links and content on Threads for Canadian users

The report, by NERA Economic Consulting, stated that “news content from traditional publishers is of low value to Meta and declining” – a claim that publishers strongly dispute. They argue instead that it boosts engagement.

These findings partly explain Meta’s increasingly combative approach, particularly its opposition to Canada’s law to support the news industry.

“The Online News Act is based on the incorrect premise that social media companies benefit unfairly from news content shared on our platforms, when the reverse is true,” says Meta, adding that news outlets are able to wield social media to expand their audiences and “help their bottom line”.

It adds: “Unfortunately, the regulatory process is not equipped to make changes to the fundamental features of the legislation that have always been problematic, and so we plan to comply by ending news availability in Canada in the coming weeks.”

Meta is assessing whether the legislation would compel it to also remove news links and content on Threads for Canadian users, one person familiar with the plans has said.

Andrew MacLeod, the chief executive of Postmedia, a big Canadian news network, says the company has been “modelling out a short-term reduction in traffic” for when Meta’s news blackout comes into force.

But he adds: “It’s good that we are shaking up the industry [as] it might create outcomes for a more viable structural future.”

Pablo Rodriguez, the minister for Canadian heritage, says in a statement to the Financial Times that the government was “deeply convinced that Google’s and Facebook’s concerns can be resolved through the regulatory process”.

“If Facebook truly believes that news has no value, they can say so at the negotiating table. Threats to pull news instead of complying with the laws in our country only highlight the power that platforms hold over news organisations, both big and small,” he adds.

“News is not as monetisable as some of the other content” such as fashion, which can link to shoppable products

—  Pinar Yildrim, associate professor of economics and marketing at the Wharton School of the University of Pennsylvania

Meta’s retreat from news comes in the wake of allegations that its failures to moderate its apps sufficiently contributed to discord around former US president Donald Trump’s election as well as the riots in January 2021, when a mob stormed the Capitol building.

Sandra Matz, associate professor of business at New York’s Columbia Business School, says Meta appears to be discouraging news and politics from Threads as a business decision to avoid more scandals over misinformation and election denial, and to facilitate moderation.

Mark Zuckerberg, Meta’s chief executive, insists Threads will be a “friendly” space in contrast to Twitter, which has loosened its moderation since Elon Musk bought the platform for $44 billion in October, frustrating some users and advertisers. Meta has not hired new moderators for Threads but is relying on those at Instagram.

“If they succeed in setting it up the way they want, it’s going to become a cultural platform,” Matz said. But, she added, “negative content and emotional content ... is addictive. It’s going to be interesting to see if Threads can pull this off.”

Pinar Yildrim, associate professor of economics and marketing at the Wharton School of the University of Pennsylvania, notes that “news is not as monetisable as some of the other content” such as fashion, which can link to shoppable products. Meta has indicated plans to run advertising on Threads.

The industry’s defenders claim Meta will be worse off as the rift deepens.

“Without trusted news and being able to share that, you’re cutting out what is going on in the real world,” says Jason Kint, chief executive of Digital Content Next, a trade association representing the digital news industry. “Long term, the question is whether it’s sustainable for them.” – Copyright The Financial Times Limited 2023