Australia to make Facebook, Google pay media firms for news

Under royalty-style system to become law this year, there will be penalties for violations

SYDNEY • Australia unveiled a draft law yesterday to force Google and Facebook to pay news media for their content or face huge fines in one of the most aggressive moves by any government to curb the power of the United States digital giants.

Australia will become the first country to require Facebook and Google to pay for news content provided by media companies under a royalty-style system that will become law this year, Treasurer Josh Frydenberg said.

"It's about a fair go for Australian news media businesses. It's about ensuring that we have increased competition, increased consumer protection and a sustainable media landscape," Mr Frydenberg told reporters in Melbou rne.

"Nothing less than the future of the Australian media landscape is at stake."

For every A$100 (S$98.50) spent on online advertising in Australia, excluding classifieds, nearly a third goes to Google and Facebook, according to Mr Frydenberg.

The "mandatory code of conduct" to govern relations between the struggling news industry and the technology firms was introduced after 18 months of negotiations failed to bring the two sides together.

Violations of the code will draw penalties of up to A$10 million per breach, or 10 per cent of either company's local turnover.

In addition to payment for content, the code covers issues like access to user data and transparency around the algorithms used to rank content in the platforms' news feeds and search results.

Under the code, drawn up by antitrust watchdog the Australian Competition and Consumer Commission, tech companies will be required to negotiate with news firms "in good faith" over payments for use of their content.

If agreement cannot be reached within three months, the issue will go to binding arbitration.

Unlike other countries' so-far unsuccessful efforts to force the platforms to pay for news, the Australian initiative uses competition law and not copyright regulations to challenge what Australia calls an "acute bargaining power imbalance" between media and the American giants.

Mr Frydenberg said legislation implementing the code would be introduced to Parliament in the coming weeks after a final round of consultations - and would include "substantial penalties" that could cost the tech companies hundreds of millions of dollars.

While the code could eventually apply to any digital platform, Mr Frydenberg said it would initially focus on Facebook and Google, two of the world's richest and most powerful companies.

Google responded quickly, saying it was "deeply disappointed" with the proposal.

"The government's heavy-handed intervention threatens to impede Australia's digital economy and impacts the services we can deliver to Australians," said Mr Mel Silva, Google's managing director for Australia and New Zealand.

Facebook issued a terse one-line response that hinted it could reconsider its activities in Australia if the proposals were implemented.

Mr Will Easton, Facebook's local manager, said: "We are reviewing the government's proposal to understand the impact it will have on the industry, our services and our investment in the news ecosystem in Australia."

The initiative has been closely watched around the globe as news media worldwide have suffered in an increasingly digital economy, where advertising revenue is overwhelmingly captured by Facebook, Google and other big tech firms.

The crisis has been exacerbated by the economic collapse caused by the coronavirus pandemic, with dozens of Australian newspapers closing and hundreds of journalists sacked in recent months.


A version of this article appeared in the print edition of The Straits Times on August 01, 2020, with the headline 'Australia to make Facebook, Google pay media firms for news'. Print Edition | Subscribe