Effective immediately, overnight Facebook banned news content from being shared in Australia across the social platform, with the ban also extending to the viewing and sharing of international news content for Australian users.  The ban comes in response to the Federal Government’s news bargaining media code which would require tech companies to negotiate with news publishers over how much to pay them for news content.

Speaking about the sharp decision, Will Easton (MD of Facebook for AU & NZ) said “the value exchange between Facebook and publishers runs in favour of the publishers — which is the reverse of what the legislation would require the arbitrator to assume.”

With 40% of all Australians accessing news via search & social media, this ban will naturally change the way Australians consume content.  Today, we’ve already seen key community welfare sites such as Bureau of Meteorology immediately cut off; a vital source of news for Australians, particularly those in fire struck regions who rely on social media for updated weather warnings.

It is a monumental blow for publishers who vastly rely on the sharing of news content as one of the primary ways of growing their subscriptions, site traffic and follower base.  That being said, some may agree with Facebook’s defiance and sharp decision as last year it is estimated that they generated approximately 5.1 billion site referrals to Australian publishers worth an estimated AU$407 million for publishers. Facebook also had grand plans to launch its News tab in Australia later this year, in line with the success generated in the USA last year.

With News specific inventory officially accounting for 4% of all inventory across Facebook, it is anticipated that it will have a minimal impact on scale from an advertising perspective. However, it remains to be seen what the long term impact will be on the Facebook audience volume, with users going directly to site for their news content, at an opportunity cost of spending time on Facebook.  Although Instagram are owned by Facebook, news content has been unaffected here, whether this might change in the near future, we are yet to see.

With Federal Government officials being encouraged to intervene, we eagerly await the extent of this bold snap decision.

Read more on the news bargaining code here.