Google and Facebook Inc. will be forced to pay media companies in Australia for publishing their news under what the government says is a world-first mandatory code of conduct.
Treasurer Josh Frydenberg said Monday that negotiations between the tech giants and traditional media platforms had made limited progress toward reaching a voluntary arrangement and the competition watchdog would unveil a draft code by the end of July for the platforms to pay fair compensation for the journalistic content siphoned from news media.
Australia's government has pledged to tackle the "power imbalance" between the digital giants and traditional media, adding to a barrage of global action against Google and Facebook. Regulators worldwide have been trying to loosen the tech giants' grip on everything from advertising and search engines to news, data and elections.
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Frydenberg said the government was "very conscious of the challenges" of forcing the companies to pay for news content, after efforts in France and Spain had failed. The payment model could be based on the cost of preparing journalistic content, or the value added to the digital platform by using it, he said.
Communications Minister Paul Fletcher said Australia would take a different approach to Europe, relying on competition law rather than copyright law.
Facebook said it was disappointed by the announcement, as it had been working to reach a voluntary agreement and had already announced investments to support news organizations struggling with declining advertising revenue.
"We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem," Will Easton, Facebook's managing director for Australia and New Zealand, said in a statement. "We've invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry and hope the code will protect the interests of millions of Australians and small businesses that use our services every day."
Google said that search results are most valuable to consumers when they are determined by relevance, rather than commercial arrangements.
Gustaf Brusewitz, a spokesman for Google in Australia, said in a statement that the company had "sought to work constructively with industry" and would continue to do so under the new mandatory rules, which are set to be unveiled in July.
"Since February, we have engaged with more than 25 Australian publishers to get their input on a voluntary code and worked to the timetable and process set out by the ACCC," he said, referring to the Australian Competition and Consumer Commission. "We have sought to work constructively with industry, the ACCC and government to develop a code of conduct, and we will continue to do so in the revised process set out by the Government today."
The announcement is the government's latest response to a sweeping report by the commission that raised concerns about the use and storage of personal data and the erosion of the mainstream media. In December, Australia said it would set up a special unit within the competition watchdog to monitor digital platforms.
The code of conduct will cover the sharing of data, ranking and display of news content and the monetization and the sharing of revenue generated from news, the government said. It will also establish appropriate penalties and a binding dispute-resolution process.
Commission Chairman Rod Sims played down any prospect of Google shutting down its Australian news platform rather than pay for content as it had done in Spain.
"Around 10% of search results are media stories. This will seriously affect the usefulness, for example, of Google Search, so I think we have to understand that there's value both ways here and I think it will be hard for Google and Facebook just to say we won't have any contact with news media at all," Sims told Australian Broadcasting Corp.
Michael Miller, Executive Chairman Australasia of News Corp. Australia, the nation's largest newspaper publisher, said, "We are looking for a fair payment and at the same time a substantial payment."
Frydenberg declined to estimate how much Google and Facebook would pay news media, other than to say it would amount to millions of dollars.
Business on 04/21/2020