Invest
Facebook’s news ban feared to have implications for the sharemarket
Facebook’s move to restrict the sharing and viewing of news in Australia could have huge implications for the sharemarket, an expert has said, as Treasurer Josh Frydenberg readies himself for another round of talks with CEO Mark Zuckerberg on Friday.
Facebook’s news ban feared to have implications for the sharemarket
Facebook’s move to restrict the sharing and viewing of news in Australia could have huge implications for the sharemarket, an expert has said, as Treasurer Josh Frydenberg readies himself for another round of talks with CEO Mark Zuckerberg on Friday.
As part of Facebook’s ban, which is the social media giant’s answer to Australia’s proposed new media bargaining law, Aussies can no longer view anything deemed news on Facebook.
This, according to RMIT University professor Dr Angel Zhong, could send shockwaves through the stock market.
“Finance research finds that news and media attention improve stock market efficiency and promote stock market liquidity,” Dr Zhong said.
But, in the absence of news, Dr Zhong expressed concern that market reactions will be delayed.
“A lot of retail investors are in the habit of using Facebook to view news. While they can still view news from other sources, it means it may take longer for retail investors to look for and read news.
“This may lead to a delayed reaction to sharemarket news, which in turn is detrimental to stock market efficiency and liquidity. For example, you read business news on Facebook each day on the way to work, which informs your portfolio adjustment decision,” said Ms Zhong.
According to recent statistics, one in three users in Australia turns to social media to gather their news and information.
She explained that the impact of news and media attention is also found to be more pronounced among small companies that attract a smaller investor base.
“Small companies with a relatively smaller investor base usually benefit more from wider news coverage and media attention,” Ms Zhong said.
Facebook confirmed that it was moving to restrict “publishers and people in Australia from sharing or viewing” news on Wednesday evening.
Facebook’s director for Australia and New Zealand, Willian Easton, said Australia’s proposed new media bargaining law misunderstands the platforms relationship with publishers who use it to share news content.
“It has left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia.
“With a heavy heart, we are choosing the latter,” said Mr Easton.
RELATED ARTICLES
About the author
About the author
Stock market
ASX companies make strides amidst federal budget chatter
In a week dominated by discussions surrounding the recently released FY27 federal budget, the financial landscape witnessed significant activity, particularly among ASX-listed companiesRead more
Stock market
ASX small caps report mixed results amid market optimism
The latest flurry of quarterly activities reports from ASX-listed small cap companies has provided a snapshot of the diverse and dynamic landscape of Australia's financial market. As April came to a ...Read more
Stock market
Adisyn Limited and Brazilian Critical Minerals make significant strides in their respective sectors
In a landscape where Australia's Information Technology sector often plays second fiddle to global giants, Adisyn Limited (ASX: AI1) is making waves with its innovative advancements in graphene ...Read more
Stock market
Australia's ASX 200 Energy Index surges amid Iran conflict
Australia's ASX 200 Energy Index has surged nearly 20% since the onset of the Iran conflict, marking its highest level in three months. This development positions Australia as the only developed ...Read more
Stock market
Webull launches Webull Connect, revolutionising access for Australian financial advisers
In a significant move that marks its entry into the Australian wealth management sector, Webull Securities (Australia) Pty Ltd, a subsidiary of the Nasdaq-listed Webull Corporation, has unveiled its ...Read more
Stock market
Future Generation Global boosts dividends with special payout, marking significant yield increase
Future Generation Global (ASX: FGG) has announced a significant boost to its dividend offerings for the year 2025, delighting shareholders with an increased fully franked full-year dividend and an ...Read more
Stock market
6K Additive secures A$48 million through initial public offering on the Australian Stock Exchange
6K Additive, a prominent player in the advanced metal powders and alloy additions market, has made a significant stride by successfully completing its Initial Public Offering (IPO) on the Australian ...Read more
Stock market
Institutional investors increase stock allocations to 18-year high amid cautious market shifts
In a recent development, State Street Markets unveiled the findings of its latest State Street Institutional Investor Indicators, revealing intriguing shifts in institutional investor behaviourRead more
Stock market
ASX companies make strides amidst federal budget chatter
In a week dominated by discussions surrounding the recently released FY27 federal budget, the financial landscape witnessed significant activity, particularly among ASX-listed companiesRead more
Stock market
ASX small caps report mixed results amid market optimism
The latest flurry of quarterly activities reports from ASX-listed small cap companies has provided a snapshot of the diverse and dynamic landscape of Australia's financial market. As April came to a ...Read more
Stock market
Adisyn Limited and Brazilian Critical Minerals make significant strides in their respective sectors
In a landscape where Australia's Information Technology sector often plays second fiddle to global giants, Adisyn Limited (ASX: AI1) is making waves with its innovative advancements in graphene ...Read more
Stock market
Australia's ASX 200 Energy Index surges amid Iran conflict
Australia's ASX 200 Energy Index has surged nearly 20% since the onset of the Iran conflict, marking its highest level in three months. This development positions Australia as the only developed ...Read more
Stock market
Webull launches Webull Connect, revolutionising access for Australian financial advisers
In a significant move that marks its entry into the Australian wealth management sector, Webull Securities (Australia) Pty Ltd, a subsidiary of the Nasdaq-listed Webull Corporation, has unveiled its ...Read more
Stock market
Future Generation Global boosts dividends with special payout, marking significant yield increase
Future Generation Global (ASX: FGG) has announced a significant boost to its dividend offerings for the year 2025, delighting shareholders with an increased fully franked full-year dividend and an ...Read more
Stock market
6K Additive secures A$48 million through initial public offering on the Australian Stock Exchange
6K Additive, a prominent player in the advanced metal powders and alloy additions market, has made a significant stride by successfully completing its Initial Public Offering (IPO) on the Australian ...Read more
Stock market
Institutional investors increase stock allocations to 18-year high amid cautious market shifts
In a recent development, State Street Markets unveiled the findings of its latest State Street Institutional Investor Indicators, revealing intriguing shifts in institutional investor behaviourRead more
