Australia to make Facebook, Google pay for local news content

Internet firms like to Facebook and Google will have to pay for news content provided by media companies under a royalty-style system that will become law this year, Treasurer Josh Frydenberg said.

This means that to continue in the news business, Facebook and Google, which currently lift news content directly from news sources, including newspapers and websites, will have to compensate the source or gather news themselves. 

“It’s about a fair go for Australian news media businesses. It’s about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape,” Frydenberg told reporters in Melbourne.

“Nothing less than the future of the Australian media landscape is at stake.”

Australian government late last year told Facebook and Google to negotiate a voluntary deal with media companies to use their content, but that did not materialise.

Canberra now says if an agreement cannot be reached through arbitration within 45 days the Australian Communications and Media Authority would set legally binding terms on behalf of the government.

The Australian government’s move is another hurdle in the path of the tech giants as they try to fend off calls for greater regulation.

It comes a day after US lawmakers, in a congressional hearing, pulled up Google and Facebook for alleged abuse of market power. This followed an inquiry into the state of the media market and the power of the US platforms. 

Google said the regulation ignores “billions of clicks” that it sends to Australian news publishers each year.

“It sends a concerning message to businesses and investors that the Australian government will intervene instead of letting the market work,” Mel Silva, managing director of Google Australia and New Zealand, said in a statement.

“It does nothing to solve the fundamental challenges of creating a business model fit for the digital age.”

Media companies, including News Corp Australia, a unit of Rupert Murdoch’s News Corp, lobbied the government to force the US companies to the negotiating table amid a long decline in advertising revenue.

While media companies continue to lose advertisement revenue, the tech giants have been reaping gains from ever increasing advertisements. A 2019 study estimated about 3,000 journalism jobs have been lost in Australia in the past 10 years, as traditional media companies bled advertising revenue to Google and Facebook.

For every A$100 spent on online advertising in Australia, excluding classifieds, nearly a third goes to Google and Facebook, according to Frydenberg.