Facebook to Spend $1 Billion on News Content Over Three Years

By Paul Ziobro

Facebook Inc. said it would spend at least $1 billion to license material from news publishers over the next three years, a pledge that comes as tech giants face scrutiny from governments around the world over paying for news content that appears on their platforms.

The spending plans are in addition to $600 million that Facebook paid since 2018 in deals with publishers like the Guardian, Financial Times and others to populate its Facebook News product in some countries, according to a blog post Wednesday by Nick Clegg, a senior Facebook policy executive.

The social-media giant's new pledge is similar to a plan Alphabet Inc.'s Google announced last year to pay more than $1 billion to license news content for its Google News Showcase over a three-year period.

Facebook removed news from its platform in Australia last week as the country's legislature debated a proposal that would have required Facebook and Alphabet Inc.'s Google to pay traditional media companies for their content.

Facebook reached a deal with the government Tuesday that would restore news to the platform in exchange for measures like additional negotiation with media companies before binding arbitration kicks in. The revised legislation cleared its last major parliamentary hurdle on Wednesday.

Australia sought to impose such requirements so that the tech companies pay a portion of the costs publishers incur to produce news content. Other governments, including Canada, have pledged to consider measures similar to what Australia has planned. Many news publishers world-wide have long voiced concerns that tech platforms benefit from their content without adequately paying for it.

In his blog post, Mr. Clegg said that the proposed Australian law would have required the company "to pay potential unlimited amounts of money" to global media companies under the arbitration system.

"It's like forcing car makers to fund radio stations because people might listen to them in the car -- and letting the stations set the price," said Mr. Clegg, a former U.K. deputy prime minister.

Facebook intends to strike deals with news publishers to have their stories appear on news products it is developing. Mr. Clegg acknowledged concerns about the concentration of power among tech companies and about ways to fund journalism, but he said that "a new settlement needs to be based on the facts of how value is derived from news online, not an upside-down portrayal of how news and information flows on the internet."

News Corp, the parent of The Wall Street Journal, has a commercial agreement to supply news through Facebook. Last week, News Corp. also struck a three-year deal with Google to license content from its publications and produce new products for Google platforms.

Write to Paul Ziobro at Paul.Ziobro@wsj.com

(END) Dow Jones Newswires

February 24, 2021 12:38 ET (17:38 GMT)

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