Australia on Friday unveiled the world’s first draft law to force Google and Facebook to pay traditional news media to publish their material in a move that is likely to encounter resistance from the tech behemoths.
Treasurer Josh Frydenberg announced the “mandatory code of conduct” to govern relations between the struggling news industry and the United States social media and search firms after 18 months of negotiations failed to bring the two sides together.
Under the plan, the tech giants will have to negotiate with Australian media companies to use their content. The code also covers issues like access to user data, transparency of algorithms and ranking of content in the platforms’ news feeds and search results.
“It’s about a fair go for Australian news media businesses,” Frydenberg told a media conference. “It’s about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape.”
Neither Facebook nor Google responded to requests for comment from Reuters news agency. Both companies, the world’s two biggest sellers of online ads, have spent years fending off demands from news media around the world for a share of the advertising revenue.
The draft version of the code, drawn up by the Australian Competition and Consumer Commission, is open for consultation until August 28. Frydenberg said legislation would be introduced to parliament shortly afterwards and could be implemented by the end of the year.
It will include “substantial penalties” that could cost the tech companies hundreds of millions of dollars, he said.
While Australia envisages the code will eventually apply to any digital platform using Australian news content, Frydenberg said it would initially focus on Facebook and Google, two of the world’s richest and most powerful companies.
— Lillian Saleh (@LillSaleh) July 30, 2020
This could be huge https://t.co/DHQFIbh0uk— Jinghua Qian (@qianjinghua) July 31, 2020
The initiative has been closely watched around the globe because news media have suffered as tech giants like Facebook and Google hoover up the advertising revenue that once helped support them.
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.
Even as broader economies have plunged into their worst recessions in years, tech firms have continued to prosper.
Facebook on Thursday reported net profit of $5.2 billion for the three months ended June, as ad sales on its platform rose 10 percent to $18.3 billion. Google, which is owned by Alphabet and makes money through advertising on search and through sites such as YouTube, said online ad sales were recovering after a March plunge and rising on Youtube. Its second quarter profit was above expectations at nearly $7 billion.
Both companies have strongly opposed any move forcing them to share advertising revenue, hinting they could simply boycott Australian media if mandatory payments are imposed.
But Frydenberg warned that the code would prohibit any “discrimination” against Australian media by the tech companies.
“Today’s draft legislation will draw the attention of many regulatory agencies and many governments around the world,” he said, calling the proposed law “world-leading”.
“Nothing less than the future of the Australian media landscape is at stake with these changes.”