Paying for News: The Legislation Forcing Google and Facebook’s Hand

For years now, Australian news organisations have lucked out as Google and Facebook redirect advertising to their digital platforms.

Treasurer Josh Frydenberg even went so far as to state that for every $100 of online advertising, $52 goes to Google, $28 to Facebook and only $19 to other platforms.

In response to the clear drop in advertising revenue only heightened by the COVID-19 pandemic, the Australian Federal Government plans to introduce new legislation which will force tech giants to pay for Australian news.

The ‘Code of Conduct’ for Google and Facebook

Developed by the Australian Competition and Consumer Commission (ACCC), the legislation is a ‘Code of Conduct’ regulating commercial dealings between digital platforms and Australian news organisations.

At its initial stage, it will only apply to Google Search and Facebook Newsfeed, with YouTube and Instagram notably not included. It is, however, designed to be reviewed after a year, with the Government stating they may include other platforms should they become big enough players in the market.

Under the Code, Google and Facebook will need to negotiate a fee with news companies for use of their content, with smaller outlets able to ‘band together’ to bargain as a group.

If no agreement can be reached, parties will be forced into arbitration where a decision will be made for them.

Here, the arbitrator will consider the:

  • organisation’s presence of the platform;
  • characteristics of the media organisation; and the
  • referral traffic provided by the digital platform.

Digital platforms which refuse to participate in negotiations will be subject to heavy penalties of up to hundreds of millions of dollars.

The Code also requires Facebook and Google to alert organisations of changes to their algorithms which would prioritise different news sites.

The effect 

Facebook and Google have both staunchly opposed the new legislation, with Facebook even threatening to remove Australian news content from its platform.

For news organisations, the legislation is expected to assist in raising revenue after significant decline caused by COVID-19 and the transition to digital advertising. The inclusion of the ABC and SBS is also expected to boost regional news, with ABC managing director David Anderson stating that they will be reinvesting compensation received from the tech giants into regional journalism.

It is clear then, that if passed, the legislation will have significant changes to the way news is accessed in Australia.

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