By Jennifer Dudley-Nicholson

Two out of every five Australians nominate social media as their main source of news and that number is even higher among young adults.

But next week many of those people will have to look elsewhere for stories as Meta shuts down its Facebook News Tab in Australia as part of a worldwide plan to withdraw its investments in news.

The move, which will also see the tech giant abandon $70 million worth of deals with local media outlets, will put Meta in conflict with the Australian government for a second time, with regulators investigating whether it can force the company back to the bargaining table.

And journalism and social media experts say the fresh fight for news will put more on the line than profits as the change could trigger a new wave of misinformation and disinformation online, and present a serious risk to small and specialised media outlets which provide an important public good.

Meta announced plans to shutter Facebook’s dedicated news section in Australia and the US in late February as part of a wider plan to banish its investments in news content.

The social network closed news sections in the UK, France and Germany in September last year.

In a statement, Meta said users wanted to see more short-form video content on its platform and news articles had become a “small part of the Facebook experience for the vast majority of people”.

“To ensure that we continue to invest in products and services that drive user engagement, we will not enter into new commercial deals for traditional news content in these countries  (including Australia) and will not offer new Facebook products specifically for news publishers in the future,” the company said.

Swinburne University of Technology media senior lecturer Belinda Barnet says the announcement did not surprise those watching Meta’s moves as the company had been fighting efforts to compensate media outlets in other nations and de-prioritising news stories on its platform.

“They have been purposefully downplaying, algorithmically, news content and they have, in fact, hidden their News Tab,” she said.

“Pull someone up on the street and ask them to find the News Tab in the app and they won’t be able to do it.”

Dr Barnet says while the company’s decision to eliminate all news investments will save the firm money, it could ultimately cost Facebook’s reputation and invite unverified, manipulated content on the network.

“I don’t think it’s a good move for them because they have enough problems with misinformation and if you look at what has happened to X (Twitter) over the past two years as Elon Musk has been making news difficult to post – the misinformation has increased and traffic has decreased, advertisers are leaving,” she said.

“Removing news content from a platform and downplaying it has unintended consequences.”

Even though Meta says users do not value news articles on Facebook, research from the Australian Communications and Media Authority shows it remains the main news source for many Australians.

The How We Access News report, released in February, found social media is the first place two in five Australians go for news, and is the go-to news site for almost half of people aged between 18 and 24 years.

Facebook provides 70 per cent of all news content on social media in Australia, ACMA says.

Despite Meta’s announcements, the company could be forced to negotiate with local media outlets again under Australia’s News Media Bargaining Code, passed into law in 2021.

Under the code, the federal treasurer can designate a digital platform if there is a “significant bargaining power imbalance” between it and news organisations and force it to strike deals with outlets or face million-dollar fines.

The Australian Competition and Consumer Commission is investigating Meta’s position, and the federal government this month warned it could take legal steps.

“We are following the process in the code and there is a very strong reason for that,” Federal Communications Minister Michelle Rowland said.

“This is a highly litigious organisation with deep pockets.”

But Public Interest Journalism Initiative chief executive Anna Draffin says Meta’s announcement was forcing media companies to play a “guessing game” about the future of their industry.

Those with expired deals know how much revenue they will lose as a result of its decision, she says, but no one knows if Meta will ban news articles from Facebook altogether if the government takes action.

“They haven’t made it clear as to whether they’re proposing a full-scale exit whether or not they’re designated under the Australian legislation,” she said.

“There’s some complexity and some steps to play out yet.”

Meta did ban news articles from Facebook in Canada last August, however, to avoid paying for news under the country’s Online News Act.

Ms Draffin says the experience of Canadian media outlets showed some large firms benefited from the change while smaller companies were put at risk.

“Anecdotally, we’ve heard that some news organisations have seen an uptick in direct subscriptions via search engines,” she said.

“The key concerns are for small outlets, as they’re less likely to have strong balance sheets that can withstand a downturn in revenue for a sustained period of time.”

Banning news articles from the world’s biggest social network could also hurt media start-ups trying to find an audience, Ms Draffin says, as well as specialist outlets, like First Nation media, who used social networks as their main platforms.

Rather than looking only at designating Meta under news code, she says, the government could take this moment to consider structural reform of the media landscape, including tax credits for news outlets conducting public interest journalism and support for more news non-profits.

Reset Australia executive director Alice Dawkins says the federal government could also use this moment to expand its laws covering social media to include “more transparency and accountability measures” in a way that led the world again.

“We were at the forefront of tech regulation when we got the Online Safety Act through and created the Office of the eSafety Commissioner,” she said.

“We’ve got to rediscover our ambition and take leadership on what the next policy framework needs to look like.”