Facebook pulls out of $1.6 billion funding scheme after Sir Nick Clegg's project failed

Meta announces that it is ending the Community News project maintained by Sir Nick Clegg. Credit: Kenzo Tribouillard/AFP

Facebook is shutting down the $1.6bn (£1.3bn) News Funding Scheme championed by Sir Nick Clegg as it fights the rise of TikTok.

Meta, the parent company of Facebook, said on Thursday that it is ending its Community News project in the UK, France and Germany.

A spokesman for the company stated, «We will not be entering into new commercial news content deals on Facebook News in these countries and do not plan to offer new Facebook products specifically for news publishers in the future.»

The company instead focused on short video, a format that is central to Instagram and in which it faces stiff competition from Chinese-owned TikTok.

Instagram users spend 17.6 million hours per day watching short videos on the app as opposed to watching short videos on the app. TikTok users spent 197.8 million hours last year, according to the Wall Street Journal.

In 2022, TikTok overtook Instagram in popularity, with 672 million downloads compared to the Meta-owned app's 547 million installs.< /p> 0103 Rapid growth of tiktok

Facebook's community news scheme was previously described by Sir Nick as something «supported by sustainable journalism».

In the UK, Meta has invested around £13.5m creating internship positions over the past five years.

Sir Nick, considered by many to be the right-hand man of Meta founder Mark Zuckerberg, said in 2021: “We absolutely we recognize that good journalism is at the heart of how open societies function: informing and empowering citizens, and holding those in power accountable.”

«That's why we've invested $600 million since 2018 to support the news industry and are planning at least another $1 billion over the next three years.»

The former vice premier led the campaign to launch the Facebook News tab Great Britain. This feature is scheduled to be removed in December.

When the tab launched in 2018, Facebook was under fire for allowing Russian troll farms to spread misinformation, including one notorious fake news factory linked to the late Wagner mercenary chief Yevgeny Prigozhin .

The Community News scheme has helped Meta deflect criticism that its dominance in online news consumption as well as the digital advertising market has contributed to the decline of independent local news outlets.

The Reuters Institute for News Studies at Oxford University said in June : «Access to news has been dominated for some time by two giants: Google and Facebook (now Meta), which at their peak accounted for just under half of internet traffic for news sites.»

This position is changing, the institute says. the report says, in part because Meta is starting to block news publishers from sharing content on its website and apps.

In 2017, Facebook and Google together accounted for more than half of global ad revenue.

According to a study by the Reuters Institute, about a third of people worldwide get their news from social networks, and a fifth use news sites and applications from well-known publishers.