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Australia Reigns in Tech Giants, Forces Facebook and Google to Pay for News Content

© REUTERS / Johanna Geron


Citing a massively disproportionate accumulation of advertising revenue, the Australian government could look to break the power of large tech giants in favour of smaller news outlets who also rely on promotional material for funding.

Facebook Inc and Google could be made to buy news content from media outlets, the Australian government decided on Monday, in a move intended to protect independent journalism which has been met with widespread opposition by social-media giants.

Regarding the new pioneering legislation, Treasurer Josh Frydenberg said that internet corporations must negotiate payments for content that is posted on their platform with local news outlets. If a deal is unable to be struck, then a state-appointed arbitrator will make the decision.
“This is a huge reform, this is a world first, and the world is watching what happens here in Australia," Frydenberg told reporters in Canberra. “Our legislation will help to ensure that the rules of the digital world mirror the rules of the physical world ... and ultimately sustain our media landscape."
The law would become the world's most stringent regulation of the power of tech giants to date, and comes after three years of investigation and consultation. In August, the dispute culminated in threats by the US companies to stop providing services in Australia.

According to a Reuters report, Facebook Australia managing director Will Easton said that the firm would conduct a review and “engage through the upcoming parliamentary process with the goal of landing on a workable framework to support Australia’s news ecosystem”.

Typically, social media websites and search engines receive payment through advertisements, leading to revenue losses for news companies and leading to closures and job losses.

Regulators are now looking to manage the behaviour of Google and Facebook, which are the recipient of four-fifths of Australian online advertising spending accumulative, Frydenberg said.

Denis Muller, an Honorary Fellow at the University of Melbourne’s Centre for Advancing Journalism, described the Australian law as both "very ambitious and very necessary”.
“Taking their news content without paying for it, in exchange for a very questionable reward of ‘reach’, seems to be a very unfair and uneven and ultimately democratically damaging arrangement", he added.

News Corp Australia executive chairman Michael Miller called the move a "significant step forward in the decade-long campaign to achieve fairness in the relationship between Australian news media companies and the global tech giants”.

This comes as Murdoch-owned News Corp cited a drop in advertising after ceasing printing more than 100 Australian newspapers.

However, draft legislation introduced earlier this year could see the law become more palatable to tech companies, ensuring that the law would not prohibit content posted on Instagram or Youtube - owned by Facebook and Google respectively.

The value of clicks directed to news sites on both platforms would also be included in negotiations, the revisions would permit.

But Frydenberg added to the list of media companies with whom the tech giants must negotiate, saying public broadcaster the Australian Broadcasting Corp and specialist public broadcaster SBS would be included, along with dominant private sector outlets such as News Corp and Nine Entertainment Co Holdings Ltd.

However, the companies themselves have in recent years established agreements with news companies in other countries.

In October, Google said it plans to pay $1 billion to news outlets worldwide for their reports for a duration of the next three years.

The new scheme, entitled "Google News Showcase" will begin in Germany, where local newspapers including Der Spiegel, Stern and Die Zeit will be involved.

In Brazil, outlets such as Folha de S.Paulo, Band, and Infobae will also be part of the new product.

Google also said in November it signed copyright accords with six newspapers and magazines in France, such as national outlets Le Monde and Le Figaro.

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