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Peter Foley / Bloomberg | fake pictures
Google and Facebook may be forced to pay Australian news publishers to distribute their content, in a landmark regulatory move by the country’s competition regulator.
Australia’s Competition and Consumer Commission was tasked with the government earlier this year to develop a mandatory code for tech giants to pay for the use of news content. If approved, a draft code announced by the ACCC on Friday would allow Australian outlets to secure payments in a matter of months.
Its goal is to address “acute bargaining power imbalances” between newsgroups and Google and Facebook, the ACCC said. Under the rules, if publishers and digital platforms can’t reach an agreement after three months of formal talks, will a “final offer” arbitration process take place? started which results in the selection of the “most reasonable” offer in 45 business days.
“Our regulatory changes are designed to create a level playing field and fair,” Australian Treasurer Josh Frydenberg said Friday. “We want the rules in the digital world to reflect the rules in the physical world. We want to ensure that consumer protection is improved, competition is increased and, of course, we offer a sustainable media environment for all Australians in the future” .
The move could make Australia the first country to force Google and Facebook to pay for news content. It comes after conversations between online platforms, ACCC, and media companies failed to reach an agreement. The draft code will undergo a month-long consultation before being debated in parliament. If approved, it is expected to be reviewed within a year.
It is still unclear how much development will affect Google and Facebook’s revenue. Google’s parent company Alphabet reported its first revenue decline in history in its second-quarter earnings report on Thursday, while Facebook posted an 11% rise in revenue. The two companies have been under regulatory focus in recent times, with their CEOs appearing alongside Amazon and Apple bosses at an antitrust hearing in Congress on Wednesday.
Google said it was “deeply disappointed and concerned” about the draft ACCC mandatory code.
“The Code discounts the already significant value Google provides to news publishers across the board, including sending billions of clicks to Australian news publishers for free worth $ 218 million,” said Mel Silva, managing director of Google Australia and New Zealand. Friday statement.
“Sends a troubling message to companies and investors that the Australian government will intervene rather than let the market work, and undermines Australia’s ambition to become a leading digital economy by 2030. It sets a perverse disincentive to innovate in the sector and does nothing to solve the fundamental challenges of creating a business model suitable for the digital age. “
William Easton, managing director of Australia and New Zealand Facebook, said the company was currently “reviewing the government’s proposal to understand the impact it will have on the industry, our services and our investment in the news ecosystem in Australia.”
Last month, Google said it would pay some publishers in Australia, Germany and Brazil directly to license their content, as part of a new service to be launched later this year. It marked a change of course for the Internet giant, which for years has avoided demands from news organizations to pay for the distribution of its work.
France’s competition regulator ruled in April that Google must pay publishers and news agencies for reusing its content. Such regulatory pressure has increased at a time when the media is grappling with a sharp decline in advertising spending due to the coronavirus pandemic.
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