Australia Will Compel Google and Facebook To Pay Local Media For Content

Despite all the recent feel-good stories about how people around the world think more positively about tech and social media, the reality is that the tech giants control a dominant share of media advertising and have stifled any attempts at innovation or entrepreneurial challenge.

It must be noted that Australia, like the UK and US, is another country in which the Murdoch press owns a significant share of the media industry and has long resented the digital companies which have surpassed it in growth and wealth. But if this action becomes a global trend, it could have a dramatic impact on those two companies' finances. JL


Kim Lyons reports in The Verge:

Australia has ordered that country’s competition watchdog to create a code of conduct for Facebook and Google which would force the tech giants to pay Australian media companies for using their content. Austalia's inquiry found — in addition to privacy concerns— that Google and Facebook were taking a large share of online advertising revenue, even though much of their content came from (local) media organizations.

The Treasurer of Australia has ordered that country’s competition watchdog to create a code of conduct for Facebook and Google which would force the tech giants to pay Australian media companies for using their content, ABC News (AU) reports. The Australian Competition and Consumer Commission was working on developing a voluntary code of conduct, but told the Australian government it was “unlikely” to get a voluntary agreement around the issue of payment for content.

The ACCC was working on the code as part of a series of recommendations from its 2019 digital platforms inquiry. The report from that inquiry found — in addition to privacy concerns— that in Australia, Google and Facebook were taking a large share of online advertising revenue, even though much of their content came from media organizations, Treasurer Josh Frydenberg said at the time.

The report called for a voluntary code that would require the companies to negotiate with news media on how to pay for their content, and advise media companies of algorithm changes that might affect online content rankings. The mandatory code the ACCC is now writing will include penalties, and define what content would be included, according to ABC.

“It’s only fair that those that generate content get paid for it,” Frydenberg said.

Australia’s newspapers and media outlets, like those in the US and elsewhere, have been hard-hit by the economic downturn due to the coronavirus pandemic, the Guardian reports. Large Australian media companies have asked staff to take pay cuts and several newspapers have halted production because of a sharp decline in advertising revenue.

A draft of the code of conduct is due to be finalized by the end of July, according to the Guardian.

Will Easton, Managing Director, Facebook Australia, and New Zealand said in a statement emailed to The Verge that the company was “disappointed” by the Australian government’s announcement. Facebook has invested “millions of dollars” to support Australian publishers, he said, through content arrangements, partnerships, and training.

“COVID-19 has impacted every business and industry across the country, including publishers, which is why we announced a new, global investment to support news organizations at a time when advertising revenue is declining,” Easton said, referring to the $100 million Facebook has pledged to invest in the news industry. “We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem.”

A Google spokesperson said in an emailed statement to The Verge that the company had been working since February with more than 25 Australian publishers for input on a voluntary code of conduct under the ACCC’s timeline.

“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 spokesperson said.