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

Australia has introduced legislation to force tech giants like Google and Facebook to pay news media publishers for their content

The cost of complying with the code is unlikely to trouble the tech giants bottom line too much either.

Google says it is "disappointed" by the policy.

The government plans to give Google and Facebook three months to negotiate with Australian media businesses fair pay for news content.

Australian Government Treasurer Josh Frydenberg said the two companies will have to negotiate for remuneration with traditional media in good faith.

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. Australian Treasurer Josh Frydenberg acknowledged the global significance at a press conference Friday, calling the drafting a landmark move that would "draw the attention of many regulatory agencies and many governments right around the world".

The code of conduct will be subject to a month-long consultation period before being debated in parliament "shortly after" August, Mr Frydenberg said.

In a move that could act as precedent for other governments globally, the Australian government is planning a new legislation, that would make it mandatory for Facebook, Google and the likes to pay local media outlets.

Campaign Asia-Pacific has reached out to Google and Facebook for further comment.

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

Google also slammed Australia's approach on Friday, warning that the regulation "sets up a perverse disincentive to innovate in the media sector".

Australia's move 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 news industry crisis has been exacerbated by the economic collapse caused by the coronavirus pandemic, with dozens of Australian newspapers closed and hundreds of journalists sacked in recent months.

Late past year, the Australian government asked the regulator to develop a voluntary code that would govern the relationship between media and the digital platforms.

Michael Miller, Executive Chairman of News Corp Australia said in a statement, "While other countries are talking about the tech giants' unfair and damaging behavior, the Australian government ..."

The code will initially focus on Google and Facebook but could be expanded to other tech companies, the treasurer said. "It's about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape".

Australia proposed new rules that will allow media companies to seek payment from Google and Facebook for articles posted on their platforms.

"But we want it to be on our terms". We want it to be in accordance with our law.

"Given the hard conditions that local media are now trading in, it's vital that broadcasters can negotiate fairer partnerships with Google and Facebook as soon as possible, and we'd like to see those in place by the end of the year". If the concerned parties can not find common ground in three months, then an independent arbitrator would take the final binding decision. In case they fail to agree on pricing, arbitrators will be appointed to make a binding decision, while in case they breach the code, they could face "substantial penalties" of up to 10% of the platform's annual turnover or $7.2 million fine.