Facebook shares have dipped by one per cent today as the company suffers the fallout of its move to block all news content in Australia.
It comes as Wall Street assesses the wider ramifications of its extraordinary decision to ban users in Australia from accessing news in a row over paying for content.
Bernstein analyst Mark Shmulik, however, said investors were likely to judge Facebook’s stand against the legislation as ‘prudent’, given the potentially wider implications of similar moves following in other big global markets.
‘While I believe Facebook said that news links only account for 4% or so of content, the danger here is contagion if other countries pursue similar legislation with broader definitions of who is a publisher – could this spiral into Facebook paying influencers for their posts?’, Shmulik said.
The fall was in line with moves in other major tech shares as Wall Street largely shrugged off outrage around the company’s decision to block all news content in Australia.
Facebook shares have dipped by one per cent today as the company suffers the fallout of its move to block all news content in Australia
Australians searching Facebook for news today were instead shown notifications saying ‘no posts’ were available (Mark Zuckerberg, pictured)
Facebook users called for a boycott of the site today amid fury after it blocked news sites in Australia amid a row over paying for content
Australians searching Facebook for news today were instead shown notifications saying ‘no posts’ were available. Attempting to share news links brought up a message saying ‘this post can’t be shared’.
Facebook is facing down calls for a boycott with ‘Delete Facebook’, ‘Boycott Zuckerberg’ and ‘Facebook We Need To Talk’ trending on rival site Twitter as fury at the move spread around the globe.
The surprise escalation of the battle over a law which would require Facebook and Google to reach deals to pay news outlets was denounced by media, politicians and human rights groups as it became clear that official health pages and emergency warnings had been scrubbed along with news sites.
Critics blasted the decision, saying it will lead to the proliferation of conspiracy theories and misinformation – which Facebook claims to be tackling.
Australian Prime Minister Scott Morrison accused Facebook of ‘thinking they’re bigger than the government’ after the site cut off all news services in the country
Meanwhile the ban also led to a host of non-news sites being blocked, including health agencies providing information on Covid, emergency services warning about fires, domestic violence shelters, charities and food banks.
Facebook’s fight with Australia comes amid a global push to force tech giants to pay for content, with similar laws under consideration in the UK, the EU and US.
Facebook has flagged commercial risks around copyright and content moderation consistently to investors in recent years, while successfully riding out the public relations fallout as its advertising revenue surged.
Along with Google owner Alphabet, it now controls more than half of the digital advertising markets globally.
The company’s shares, up 33% last year even as the platform was widely criticized for its handling of hate speech and misinformation related to COVID-19, dipped 1% in pre-market trade in New York.
Like others of the ‘stay-at-home’ stock market winners from the past year’s COVID-19 lockdowns, Facebook has soared in value and is now worth almost $800 billion. Filings show that in the past three months, company insiders have sold $788 million of shares.
Another analyst, Mirabaud Securities’ Neil Campling, contrasted Facebook’s ‘PR disaster’ with Google’s unveiling this week of a multi-year deal for news content with Australian tycoon Rupert Murdoch’s News Corp.
Users of rival Twitter gleefully took to posting memes calling for the site to be boycotted
Others posted images showing their Facebook accounts have been scheduled for deletion
The decision means Daily Mail Australia’s nearly five million followers can no longer access our news content on Facebook
Furious Australian PM Scott Morrison said the move proves that big tech companies ‘think they are bigger than governments and that the rules should not apply to them.’
He added: ‘Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing.’
‘These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them.
‘They may be changing the world, but that doesn’t mean they run it.
‘We will not be intimidated by BigTech seeking to pressure our Parliament.’
Mr Cicilline added: ‘Threatening to bring an entire country to its knees to agree to Facebook’s terms is the ultimate admission of monopoly power.’
Matt Stoller, of the American Economic Liberties Project, said: ‘Facebook deleted huge amounts of important content on a critical piece of social infrastructure in order to threaten a democratic society’s sovereign power.
‘The details are complex, the underlying power play is simple.’
Australian politicians are currently debating new laws which would force big tech companies to compensate news outlets for stories they host on their platforms.
The move comes in protest at a new law in Australia which would force sites like Facebook to pay for the news content they host (pictured, CEO Mark Zuckerberg)
The law – the News Media Bargaining Code – was being debated by parliament this week, with ministers voting to approve it on Wednesday night.
The bill now returns to the Senate for final approval, where it is expected to pass quickly.
When it passes, it will become the first such law requiring tech giants to compensate publishers for hosting their content.
Facebook and Google have been leading opposition to it, saying it is ‘unworkable’ and unfairly targets their businesses.
At one point Google had threatened to quit Australia entirely if the law passed, but has since softened its stance and begun striking deals with news outlets.