On Thursday, the Australian government released a draft code of conduct that would make tech companies pay media companies for their news. Officials also announced they plan to give Google and Facebook three months to negotiate with Australian publishers.
- The code not only requires tech firms to compensate news companies for their content but also to provide them with access to their user data, 28-days notice for ranking algorithm changes, and presentation alternations to the content.
- If the U.S.-based tech firms could not reach a deal with the Australian publishers, then independent arbitrators would be appointed to make a binding decision.
- Code breaches could attract penalties of up to 10% of the platform’s annual turnover or a 10 million Australian dollar ($7.2 million) fine.
The driving force: Treasurer of Australia, Josh Frydenberg, said the draft seeks to increase competition, consumer protection, and sustainability in the media landscape.
- “There is a fundamental bargaining power imbalance between news media businesses and the major digital platforms, partly because news businesses have no option but to deal with the platforms, and have had little ability to negotiate overpayment for their content or other issues,” Australian Competition & Consumer Commission (ACCC) Chair Rod Sims said.
- A 2019 study calculated about 3,000 journalism jobs have been lost in Australia over the past 10 years. This is primarily due to publishers losing out on advertising revenue to Google and Facebook who do not compensate them for the use of their content
The response: As expected, Google and Facebook have pushed back on the code. Google went as far as to label the draft as ‘heavy-handed’ and indicated that it could impede the digital economy.
- “Our hope was that the code would be forward-thinking and the process would create incentives for both publishers and digital platforms to negotiate and innovate for a better future, so we are deeply disappointed and concerned the draft code does not achieve this” – Google Australia and New Zealand managing director Mel Silva.
- Facebook Australia and New Zealand MD, Will Easton, stated that Facebook was reviewing the code to “understand the impact it will have on the industry, our services, and our investment in the news ecosystem in Australia.”
Zoom-out: It is not the first time governments have tried to make tech firms pay publishers for their content. Previous attempts have failed, but if Australia does adopt this code, it could serve as a model for the rest of the world.