Australian Prime Minister Scott Morrison said on Friday that he discussed the progress of the “media platform bill” with his Indian counterpart, Narendra Modi, during a telephone conversation a day earlier. The discussion followed Facebook’s decision to restrict Australian publishers and individuals from sharing or viewing news content on its platform.
The controversial legislation, titled Mandatory Trading Code for Media and Digital Platforms, aims to make two big technologies, Google and Facebook, pay content publishers to share news on their platforms. In announcing the decision on Wednesday, Facebook said the bill, already approved by the lower house of parliament, “fundamentally misunderstands the relationship between our platform and the publishers who use it to share news content.”
“It has left us with a tough choice: try to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. It is with great regret that we chose the latter, ”said William Easton, managing director of Facebook Australia and New Zealand, in a blog post.
What is the reason for the code?
The Australian Competition and Consumers Commission (ACCC), which drafted the code, had identified an imbalance in bargaining power between Australian digital platforms and news companies. The competition regulator had said in a report that organizations like Google and Facebook are more than just distributors or mere intermediaries in the supply of news in Australia. According to the president of the ACCC, the bill would level the imbalance in negotiating power so that fair trade agreements can be made.
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These are some of the key elements of the code:
The news media trading code will create a framework for registered news media corporations and digital platforms to negotiate financial remuneration for the use and / or reproduction of news content.
Digital platform corporations such as Google and Facebook will have to provide news business corporations with a variety of information, including advance notification of planned algorithm changes that will have a significant effect on referral traffic to covered news content. .
The law would force the two Big Techs to enter into binding arbitration with the media if they cannot reach an agreement on the value of news content within three months. The arbitrator will make the final decision between the payment proposal submitted by both parties.
Tech giants can make standard offers to news outlets, particularly smaller ones, to cut the time and cost associated with negotiations.
How did Google and Facebook react?
Google argued that the “baseball arbitration model” incentivizes publishers to make scope claims and resort to arbitration rather than good faith negotiations. He had even threatened to remove his search engine from Australia if the government forced him to pay the media for his news content. However, the company has reluctantly reached agreements with media companies, including NewsCorp, to pay for the journalism.
On the other hand, Facebook has decided to tackle the issue head-on, not yielding, for the moment, to government pressure. Easton said platforms have fundamentally different relationships with news content, noting that Google Search is “inextricably intertwined with news and publishers do not voluntarily provide their content.” He argued that publishers voluntarily choose to post news on Facebook, allowing them to “sell more subscriptions, grow their audience, and increase ad revenue.”
“For Facebook, the commercial gain from news is minimal. News accounts for less than 4% of the content that people see in their News Feed, ”he added.
Whats Next?
Starting Monday, the legislation will be debated in the Senate, which is expected to pass the law by the end of the week. Australia is mobilizing support in its fight against Facebook and Morrison’s recent discussions with Prime Minister Modi, his Canadian counterpart Justin Trudeau, French President Emmanuel Macron and Britain’s Boris Johnson are proof of this. Morrison told reporters on Friday that “people are watching what Australia is doing” and “are already following this path”, indicating broader support for the issue.
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