Meta Clarifies Stance on Indonesia's Compensation Law, Continues Negotiations

Meta Platforms Inc META, the parent company of Facebook, announced on Thursday that it interprets a new law in Indonesia, which mandates digital platforms to compensate news publishers for their content, as not applying to them for content that publishers post voluntarily on its platforms. 

This statement came after Indonesia’s president enacted the law earlier in the week, which is set to become effective in six months. 

Meta’s director of public policy for Southeast Asia, Rafael Frankel, conveyed this understanding following extensive discussions with the Indonesian government, Reuters reports.

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The legislation requires digital platforms and news publishers to form partnerships, potentially involving paid licenses, revenue sharing, or data sharing. 

This move by the Indonesian government is part of a broader global concern over the perceived power imbalance between digital platforms and news content providers.

Internationally, Australia has been at the forefront of addressing this issue with its News Media Bargaining Code, enacted in March 2021. Following this code, Meta and Google have negotiated with media outlets, compensating them for content that attracts clicks and generates advertising revenue, setting a precedent for similar regulations worldwide.

Recent reports indicated Meta has seen a significant decline in its contribution to traffic referrals for major news sites, dropping to 33% in December from 50% a year earlier. 

This decrease comes amidst a larger dispute between news publishers and tech giants over compensation for content use. 

Furthermore, Facebook’s referral traffic has fallen to 6% from 14% over five years, with publishers like Mother Jones experiencing a dramatic 99% reduction in Facebook traffic since 2017. 

Price Action: META shares traded higher by 4.44% at $488.82 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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