SYDNEY – A decision by social media giant Meta to stop paying Australian media outlets for news content has led to warnings that misinformation will spread, and also sparked calls for the government to “step in” and fund quality journalism.

The move by Meta, which owns Facebook and Instagram, came as the firm was due to renew its agreements to pay media outlets. The agreements, due to expire within months, were reached as part of a world-first initiative by Australia in 2021 to force technology giants to pay media outlets for news content.

In recent years, media firms have suffered a loss of advertising to social media platforms, which often generate traffic through the promotion and sharing of news stories.

About 45 per cent of Australians access news from social media, and about 32 per cent do so from Facebook, compared with 23 per cent who do so from YouTube, 14 per cent from Instagram and 12 per cent from X, formerly Twitter.

The Australian initiative – called the News Media Bargaining Code – resulted in Meta and Google agreeing to pay an estimated A$200 million (S$176 million) a year to media outlets, including about A$70 million from Meta.

On March 14, Meta defended its decision to end the payments, saying in a blog post that “global tech companies cannot solve the longstanding issues facing the news industry”. It said interest in news was declining on its platforms and that “news is not the reason people use Facebook and Instagram”.

“Forcing technology companies into commercial relationships will not solve the long-term challenges facing public interest journalism,” it said.

Meta’s decision has led to a furious response from the government and media outlets.

The government has threatened to take action under the code that would force Meta to negotiate new deals with media outlets. But such action could prompt Meta to block all news from its platforms – a move it took in Canada in 2023 after the Canadian government, following Australia’s initiative, tried to force the firm to pay for content.

Australia’s communications minister, Ms Michelle Rowland, said on March 13 that Meta’s plan to end its payments had delivered a “devastating” blow to the nation’s journalism. “It will have a profound impact on the quality of news media in this country – in terms of its impact and reach,” she told Sky News.

Experts believe that the loss of funding for media outlets will lead to a decline in quality journalism and that the government should consider directly funding public service journalism.

Dr Sacha Molitorisz, from the University of Technology Sydney, told The Straits Times that Meta’s move had “serious implications” and the potential removal of news from its platforms could lead to a proliferation of misinformation.

“If Facebook and Instagram remove news altogether, we will have an impoverished information environment,” he said.

“It is a real concern for anyone who cares about the quality of information in the public sphere.”

Some analysts believe that the decline in advertising revenue for media outlets is impossible to replace and that the government will ultimately need to help support quality journalism.

Professor Amanda Lotz, a media studies expert at Queensland University of Technology, said it was crucial to ensure the survival of quality media outlets that report on the government and promote accountability.

“We need to look at journalism the way we look at streets and hospitals,” she told ABC News. “It’s a thing that’s good for all of us to have.”

Dr Molitorisz suggested that the government could consider imposing a public interest journalism levy on digital platforms. Funds collected would be dispensed at “arm’s length”, potentially through an independent body that could decide how funds are spent.

“If the government is dishing out public interest funding, it is important to ensure that the money is distributed fairly rather than on a partisan and self-serving basis,” he said.

Media firms have warned that Meta’s withdrawal of funding presents an “existential” threat to the future of journalism, and have urged the government to enforce the code.

Mr Bill Browne, an expert on democracy and accountability from The Australia Institute, a progressive public policy think-tank, said that if the market did not fund journalism, then the “government should step in”.

“Three years ago, Australia sent the world a message: It is possible to fight the big tech bullies and win,” he wrote in The Canberra Times on March 11.

“Now, Facebook has struck back. The world will be watching what Australia does next.”