Australia passes law forcing Facebook and Google to pay for news Media news

The legislation could provide a framework for other countries seeking to tackle the dominant position of platforms.

Australia’s parliament on Thursday passed landmark law requiring global tech giants to pay for news content shared on their platforms, in a move that is being closely watched around the world.

The law was passed after a last-minute deal that watered down binding rules Facebook and Google had fiercely opposed, and which last week prompted Facebook to delete all news from its Australian platform.

“The code will ensure that news media companies are fairly compensated for the content they generate, thereby helping to support public service journalism in Australia,” said Treasurer Josh Frydenberg and Minister of Communications Paul Fletcher in a joint press release. The rules will be reviewed after one year.

Google will now pay for news content that appears on its Showcase product, and Facebook is expected to pay vendors that appear on its News product, which is due to be rolled out in Australia later this year.

Regulators had accused the companies, which dominate online advertising, of draining money from mainstream news outlets while using their content for free.

The law was developed after extensive analysis by the Australian antitrust regulator and nearly three years of public consultation and could encourage countries like Britain and Canada to consider similar laws.

Big tech companies had fiercely opposed the legislation, fearing it would threaten their business models.

In particular, the companies opposed rules that made negotiations with media companies mandatory and gave an independent Australian arbitrator the right to impose a monetary settlement.

This prospect has been considerably reduced by the last minute amendments.

“Importantly, the code encourages parties to engage in business negotiations outside of the code and the government is pleased to see Google and more recently Facebook’s progress in securing trade deals with Australian news media companies.” , said Frydenberg.

Changed landscape

Google was also keen to avoid setting a precedent that platforms would have to pay anyone for links, which could render their flagship search engine unusable.

Facebook had initially claimed that being forced to pay for information was not worth it and that publishers willingly shared content on the platform.

The two companies now have two more months to make new deals with news organizations and avoid binding arbitration.

Google has already negotiated deals worth millions of dollars with local media companies, including the two largest: News Corp of Rupert Murdoch and Nine Entertainment.

Facebook, which made a net profit of $ 29 billion last year, on Tuesday announced its first draft deal with Australian media company Seven West.

Facebook and Google each said they would invest approximately $ 1 billion each in news worldwide over the next three years.

Critics of the law say it punishes innovative companies and amounts to a financial grab from mainstream politically connected media, including News Corp, which dominates the industry in Australia and the UK and operates Fox News in the states. -United.

Nick Clegg, Facebook’s head of global affairs and former UK Deputy Prime Minister, said on Thursday that the initial bill would have forced Facebook to pay “potentially unlimited sums to multinational media conglomerates under an arbitration system that deliberately misrepresents the relationship between publishers and Facebook ”.

Thousands of journalism jobs and dozens of media outlets have been lost in Australia alone over the past 10 years as advertising revenue has gone digital.

For every $ 100 spent by Australian advertisers today, $ 49 goes to Google and $ 24 to Facebook, according to the country’s watchdog.

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