'World first': Laws will force Google, Facebook to pay for news in Australia

7:22 am on 9 December 2020

New laws forcing tech giants Google and Facebook to pay news organisations for access to their journalism will be introduced to the Australian Parliament today, in what the Treasurer is describing as a "world first".

Facebook and Google apps on a a tablet.

Photo: AFP

The mandatory bargaining code is the result of many years of complaints from traditional media outlets that social media platforms benefit from the hard graft of journalists without paying a cent for it.

Google and Facebook have long argued in response that media organisations are overlooking the benefit they derive from referrals and clicks through to their websites.

But Treasurer Josh Frydenberg is siding with the broadcasters and publishers, saying advertising revenue in areas such as print newspapers has plummeted by 75 percent since 2005.

"For every $100 of online advertising spend, $53 goes to Google, $28 goes to Facebook, and $19 goes to other participants," Frydenberg said.

Negotiations will be first step

We're yet to see the actual legislation, but the Treasurer and Communications Minister Paul Fletcher gave an indication of how it would work yesterday.

Social media companies will be encouraged into negotiations with media companies over how much they will pay for access to their content.

The exact rate would be determined by the two parties. Smaller media companies would also be able to band together to bargain as a group, or agree to "standard" offers made by the tech platforms.

"The word coming back to us is that there are deals that may be struck very soon between the parties," Frydenberg said.

Along with commercial media, the ABC and SBS are also included. The government would not say whether any revenue flowing from the code would affect future public broadcasting funding decisions.

The only two platforms affected so far are Google Search and Facebook NewsFeed, but the Treasurer would have the power to "designate" other platforms if they become big enough players in the market.

What happens if they don't reach a deal?

If the media outlets can't strike a deal with Facebook and Google, or are unwilling to do so, they will be forced into arbitration where a decision is made for them.

Frydenberg said the independent decision-maker would have to take into account the various characteristics of the media organisation involved, and its presence on the social media platform - as well as considering the benefit to the news organisations "by having eyeballs on their product".

Australia's Resources and Energy Minister Josh Frydenberg

Treasurer Josh Frydenberg says an independent arbitrator will be part of the process as major platforms and news organisations fix prices for the use of news stories. Photo: AAP

There's no dollar figure on exactly how much media companies would be paid, as that's still up for negotiation under each deal.

There are also elements of the code which relate to how the social media companies actually run their operations, with a new requirement for Google and Facebook to alert news outlets 14 days ahead of any changes to their algorithms (which prioritise how news content appears on their sites).

What will the result be?

Google and Facebook's opposition to the measures in the past has been clear.

Facebook went so far as to threaten to cut Australian news content from its platform altogether, arguing it didn't contribute much to its revenue and it could live without it.

The company also said it supported Australian journalism in other ways, through standalone funding and grants.

Will Easton, managing director of Facebook Australia, said yesterday his company would review the draft legislation once it was made public.

"We'll continue to engage through the upcoming parliamentary process with the goal of landing on a workable framework to support Australia's news ecosystem," he said.

A Google spokesperson said last night: "We haven't seen the revised code yet."

Google had previously said the draft laws would have required it to hand over more personal data to big news organisations - something the ACCC rubbished as "misinformation".

So, one result of this could be significant changes to how people access their news, particularly if they use Facebook and Google as the forums where they find their news.

But, it could also prop up ailing media businesses, brought to their financial knees by changing audience trends and the coronavirus pandemic taking a sledgehammer to already dwindling advertising revenue.


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