31 July 2020CopyrightMuireann Bolger

Australia to make Facebook, Google pay for news in world first

Facebook and  Google will have to pay Australian media outlets for news content in an unprecedented bid to protect independent journalism and copyright.

The  Australian government unveiled its  draft news media bargaining code today, July 31, which will force the technology companies to negotiate payments with news outlets for content published on their services. The announcement comes after months of negotiations between news outlets and the tech companies failed to lead to a voluntary agreement.

The draft code will allow news media businesses to bargain individually or collectively with Google and Facebook over payments, and companies will have to provide advance notice of algorithm changes affecting news ranking and transparency over advertising runs against news content.

The code, devised by the Australian Competition and Consumer Commission (ACCC), compels the companies to agree terms “in good faith” over payments for use of their content. During a news conference held today, and  reported by Reuters, Australia Treasurer Jonathan Frydenberg said that the new law was designed to “be fair” to the country’s media businesses.

He said: “It’s about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape”. He added that “nothing less than the future of the Australian media landscape is at stake”.

If an agreement cannot be reached within three months, the issue will go to binding arbitration to determine the amount of payments. Frydenberg said that legislation implementing the code would be introduced into parliament in the coming weeks and include “substantial penalties” that could cost the technical companies hundreds of millions of dollars.

He added that while the law would eventually apply to any digital platform using Australian news content, it would initially focus on Facebook and Google. In a statement, Google strongly condemned the government’s “heavy handed intervention”. Mel Silva, managing director of Google Australia and New Zealand, said:  The Code discounts the already significant value Google provides to news publishers across the board - including sending billions of clicks to Australian news publishers for free every year worth $218 million.

“It sends a concerning message to businesses and investors that the Australian government will intervene instead of letting the market work, and undermines Australia’s ambition to become a leading digital economy by 2030.” He added that “the code does nothing to solve the fundamental challenges of creating a business model fit for the digital age”.

The move is expected to be closely watched by governments and media outlets worldwide. Earlier this year, the  French competition regulator,   Autorité de la concurrence, ordered Google to negotiate royalties with news publishers for use of their content, in line with the  EU Copyright Directive.

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