Meta is ending its deals to pay Australian publishers for their premium content and is shutting the Facebook news tab.
The current agreements, which pump tens of millions of dollars into news publishers' budgets, will not be renewed.
Media groups in Australia are now looking to the federal government and the news bargaining code, which can apply fines of up 10% of annual turnover for failing to bargain in good faith.
"Meta is using its immense market power to refuse to negotiate," says Michael Miller, executive chair of News Corp Australia.
He says the decision will directly impact the viability of Australia's many small and regional publishers.
Prime minister Anthony Albanese says it is critical the media be properly funded.
"The idea that one company can profit from others’ investment, not just investment in capital but investment in people, investment in journalism is unfair," he said. "That’s not the Australian way.”
The federal government is seeking advice from Treasury and competition watchdog the ACCC on next steps.
The news bargaining code is a mandatory code of conduct which governs commercial relationships between Australian news businesses and designated digital platforms, including Meta and Google, which benefit from a significant bargaining power imbalance.
The social media platform says it will not enter into new commercial deals for traditional news content and will not offer Facebook products specifically for news publishers.
Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland says the decision represents a dereliction of Meta's commitment to the sustainability of Australian news media.
"The government has made its expectations clear," the ministers said. "The decision removes a significant source of revenue for Australian news media businesses. Australian news publishers deserve fair compensation for the content they provide."
Meta will in early April "deprecate" Facebook News, a dedicated tab in the bookmarks section on Facebook that spotlights news in the US and Australia.
Seven West Media CEO James Warburton says Meta needs to be "designated" under the news media bargaining code.
"The case has not only been made but proven and we welcome Ministers (Stephen) Jones and (Michelle) Rowland’s commitment to the News Media Bargaining Code," says Warburton.
"We will work constructively with the ACCC and Treasury to ensure their designation."
Mike Sneesby, CEO at Nine Entertainment, says Meta's decision does not recognise the significant and increasing value of Nine's journalism.
"We believe the News Media Bargaining Code provides an appropriate framework for a fair value exchange between companies," he says.
"Regardless of the Meta announcement today, the value created on their platform from the use of Nine's IP is both unquestionable and growing and we strongly believe Meta should negotiate in good faith around the fair compensation for that value exchange."
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.