Australia will force Facebook and Google to pay media companies for publishing their news

The government says the move is the world's first such mandatory code of conduct

(FILES) This file picture taken on October 1, 2019 shows the logos of mobile apps Facebook and Google displayed on a tablet in Lille. Australia announced on April 20, 2020 it will begin forcing Google and Facebook to pay news companies for content, in a landmark move aimed at shielding traditional media from the tech giants' digital dominance. / AFP / DENIS CHARLET
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Google and Facebook will be forced to pay media companies in Australia for publishing their news under what the government says is a world-first mandatory code of conduct.

Treasurer Josh Frydenberg said on Monday that negotiations between the tech giants and traditional media platforms had made limited progress toward reaching a voluntary arrangement and the competition watchdog would unveil a draft code by the end of July.

Australia’s government has pledged to tackle the “power imbalance” between the digital giants and traditional media, adding to a barrage of global action against Google and Facebook. Regulators worldwide have been trying to loosen the tech giants’ grip on everything from advertising and search engines to news, data and elections.

Mr Frydenberg said the government was “very conscious of the challenges” of forcing the companies to pay for news content, after efforts in France and Spain had failed. The payment model could be based on the cost of preparing journalistic content, or the value added to the digital platform by using it, he said.

Facebook said it was disappointed by the announcement, as it had been working to reach a voluntary agreement and had already announced investments to support news organisations struggling with declining advertising revenue.

“We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem,” Will Easton, Facebook’s managing director for Australia and New Zealand, said in a statement. “We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry and hope the code will protect the interests of millions of Australians and small businesses that use our services every day.”

Google said that search results are most valuable to consumers when they are determined by relevance, rather than commercial arrangements.

“Since February, we have engaged with more than 25 Australian publishers to get their input on a voluntary code and worked to the timetable and process set out by the ACCC [Australian Competition and Consumer Commission],” a spokesperson for the company said. “We have sought to work constructively with industry, the ACCC and government to develop a code of conduct, and we will continue to do so in the revised process set out by the government today.”

The announcement is the government’s latest response to a sweeping report by the ACCC that raised concerns about the use and storage of personal data and the erosion of the mainstream media. In December, Australia said it would set up a special unit within the competition watchdog to monitor digital platforms.

The code of conduct will cover the sharing of data, ranking and display of news content and the monetisation and the sharing of revenue generated from news, the government said. It will also establish appropriate penalties and a binding dispute-resolution process.