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Indonesian Government Proposes Scheme To Force Digital Platforms To Pay for News Content

Every time this comes up it seems like a misinterpretation of web usage data, but money, and pressure from influential publishers, still clearly has a strong hold on political policy.

This week, Indonesian President Joko Widodo has announced that he has approved a new regulation that will require digital platforms, including Facebook and Google, to share revenue with local media outlets that provide them with content.

As reported by Reuters:

The regulation, posted on the government’s website, suggests cooperation between digital platforms and media companies could be in the form of paying licenses or sharing data of news users. A committee will be formed to ensure digital platforms fulfill their responsibilities to the media companies.”

Sound familiar?

That’s because a similar regulation has already been enacted in Australia, while Canada tried to follow suit last year, to less than ideal effect.

Back in 2021, the Australian government proposed a revenue-sharing structure designed to benefit local publishers, which would essentially force Facebook to pay for news content shared within its apps.

Meta responded by banning Australian publisher content from its apps for a period, before rapid renegotiations saw a new, compromised deal struck. In retrospect, Meta should never have made any deal, but the watered-down “News Bargaining Code” was eventually approved, which the Australian Government claims has since led to over $AU200 million being re-distributed to local media providers.

Which is far less than it would have been under the original proposal, and those payments have declined significantly since, as Meta has actively worked to reduce the presence of news content in its apps.

But nevertheless, that cash carrot was enough to see Canada implement similar legislation last year, which Meta responded to by banning Canadian publishers from its apps, which has cost Canadian outlets traffic and revenue, and still remains in effect.

So, not quite the outcome that Canadian officials were seeking.

The thing is, as Meta has repeatedly noted, news content is not a big part of its services, and has become even less of a consideration over time.

Meta’s increasing reliance on AI recommended content, primarily Reels clips in-stream, has further reduced its need for publisher material in recent years, and as that continues to decline, so too does the bargaining power of media outlets that are seeking a share of Meta’s massive intake. Indeed, just recently, Meta announced that it’s planning to make political content opt-in by default, which further highlights that it’s not reliant on news publishers the way that legislation like this suggests.

The ultimate outcome, then, is that publishers will simply lose traction, as governments try to impose rules that exacerbate Meta’s retreat from news content.

It’s legacy media trying to hold onto market share, it’s a misinterpretation of incentive drivers, and a misunderstanding of market power. Meta, whether publishers like it or not, holds all the power in this relationship, and its continued move away from news content can’t be curbed by enforcing tariffs on certain content use.

Ultimately, as noted, Meta misstepped by negotiating with Australian regulators, and accepting a watered-down version of that nation’s revenue share proposal, because that opened the door for others to enact the same.

Which Meta now has to respond to by shutting them down, which is what’s going to happen again in Indonesia, if this proposal is pushed through.

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