Yahoo Finance Businesses ‘caught in crossfire’ of ‘hyper-aggressive’ Facebook act
Australian small- and medium-sized businesses have been some of the unexpected victims of Facebook’s news ban, one analyst has said.
The social media juggernaut sparked instant backlash on Thursday morning when it announced early on Thursday morning that it was restricting users from sharing news content in Australia.
But the ban has been labelled as “hyper-aggressive” by industry research provider IBISWorld senior industry analyst Liam Harrison, amid revelations that it has also blocked the pages of governments, health authorities, unions, emergency services and weather bureaus, and more. The tech giant had even inadvertently banned its own Facebook page.
But those entities aren’t the only victims; small businesses have been hamstrung by the sweeping ban as well, said Harrison.
“Unfortunately, a lot of small business is getting caught in the crossfire, which can have some significant ramifications,” he told Yahoo Finance.
“Facebook is being overly aggressive with its anti-news algorithm and treating small business pages as news.”
For small businesses, “just a small amount of downtime” can have consequences to the bottom line and with getting customers in the door, with small businesses relying on week-to-week cash flow more than their larger counterparts.
Other side-effects could be that Facebook’s ban results in a drop in the platform’s overall user numbers.
“Users can act in unexpected ways when this type of incident occurs, so there may be a larger drop in overall use than what Facebook is expecting.”
However, the ban is unlikely to cause sweeping “industry-wide disruption,” and will more likely be “little spots here and there”.
'Community impact is significant': Communications Minister
In a press conference on Thursday afternoon, Minister for Communications Paul Fletcher slammed Facebook's refusal to pay for journalism as against its own interests, as well as having a serious impact on the community.
"What they're effectively saying to Australians is ... 'You will not find information that meets those standards of accuracy on our site.'
"That seems a very surprising position and one that is unlikely to be in the long-term interest of their brand. And, of course, the community impact of this is very significant."
He added that the Federal Government was in discussions with Facebook to ensure that authorised government and heath pages would be restored.
"The fact that there are organisations like health departments, fire and emergency services and so on who have had their Facebook pages blocked – that's a public safety issue," he said.
"I've spoken to Facebook this morning and said the Government expects them to restore those pages as quickly as possible.
"There is great responsibility that comes with being a platform that ... has over 17 million Australians visit it every month."
Google Search exit would hit harder
Facebook’s news ban will be nothing compared to if Google Search made good on its threat to pull out of Australia, which Harrison last week warned would be “economic death” for small businesses and Aussie jobs.
Coffee shops, restaurants, hair salons, holiday homes and caravan parks would be among the hardest-hit sectors, with many small businesses depending on Google visibility to build their customer base.
“It’s a different situation, as Google would’ve pulled the entire Search service. Small businesses would lose all that exposure,” Harrison said.
“With Facebook, they’re only losing part of it; it’s just the news.”
Make your money work: Follow Yahoo Finance Australia on Facebook, Twitter and Instagram, and subscribe to the free Fully Briefed daily newsletter.
