Australia to force Google and Facebook to pay for content

Country will draft mandatory regime after voluntary talks moved too slowly

Australia will force Facebook and Google to pay for content created by traditional media companies in a move aimed at easing digital disruption in the sector.

The government’s decision comes in response to a deepening crisis in the global newspaper industry, as a slump in advertising exacerbated by the coronavirus pandemic compels scores of publishers to slash costs and cease printing.

Google and Facebook are facing a similar push by competition authorities elsewhere including the EU. In France, authorities this month ordered the two global digital platforms to negotiate "in good faith with publishers and news agencies on the remuneration for the re-use of their protected content".

Josh Frydenberg, Australia's treasurer, said on Monday that the Australian Competition and Consumer Commission would draft a mandatory regime of revenue sharing between the US technology companies and local media groups, with efforts to reach a voluntary agreement progressing too slowly.

“We’re very conscious of the challenges and complexity of ensuring a mandatory code. Many other countries have tried it without much success,” Mr Frydenberg told Australian Broadcasting Corp. “We think we can be world leading.”

He said government policy to promote competition, enhance consumer protection and support a sustainable media landscape needed to be accelerated due to the pressure on the country’s media sector.

“The government has instructed the ACCC to develop a mandatory code to address commercial arrangements between digital platforms and news media businesses,” Mr Frydenberg said. The new code will cover “the sharing of data, ranking and display of news content and the monetisation and the sharing of revenue generated from news”, he said.

Tighter regulations

Australia’s competition regulator completed one of the world’s most comprehensive inquiries into digital media platforms last year, recommending a range of tighter regulations including ensuring Facebook and Google share advertising revenue they generate from traditional media content created by publishers and broadcasters.

The regulatory review pinpointed the dominance of Google and Facebook in Australia, noting that for every A$100 (€58) spent on online advertising, Google captures A$47, Facebook A$24 and just A$29 goes to other participants in the market.

Michael Miller, News Corp Australia executive chairman, accused the two US digital platforms of building up trillion-dollar businesses by using other people's content and refusing to pay for it, which he said put at risk the original reporting that keeps communities informed.

This month News Corp stopped printing 60 community newspaper titles in Australia, blaming a sharp fall in advertising due to the coronavirus pandemic and the loss of revenue due to digital disruption.

Facebook said it was disappointed by the government’s announcement, as it had worked hard to reach a voluntary accord. “We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem,” the company said.

Google said it had worked for years to be a collaborative partner to the news industry, and “will continue to do so in the revised process set out by the government”.

The US tech company has warned it could withdraw its Google News service in nations that impose charges for displaying media content, which Google says does not generate significant profit. In 2014 it pulled Google News from Spain when Madrid imposed fees on online content aggregators. – Copyright The Financial Times Limited 2020