This baby is only 10 hours old. Notice the asymmetric latch: chin touches the breast, but not the nose and the baby covers more of the areola with his lower lip than his upper lip. He is also tilted up somewhat towards the mother.
He is drinking milk from the breast. You can tell because of the pause in the chin just as he opens his mouth to its widest before closing again. The pause is subtle here because the baby is getting only small amounts of colostrum—as nature intended! If necessary, compression can help the baby get more milk (see the video clip of the 2 day old baby at this site). The very large amount of formula an artificially fed baby gets in the first few days is not physiologic or natural or normal and has never been proved to be safe.