Australia passes landmark law requiring tech giants to pay for news

Sydney: The Australian parliament on Thursday passed landmark legislation requiring global digital giants to pay for local news content, in a move closely watched around the world.

The law was easily passed after a recent deal relaxed binding rules that Facebook and Google had vehemently opposed in exchange for tech giants agreeing to pay local media companies.

The new law paves the way for Google and Facebook to invest tens of millions of dollars in local content deals, and could provide a model for resolving corporate conflicts with regulators around the world.

Google will now pay for the news content that appears in its “Showcase” product, and Facebook is expected to pay service providers who appear in its “News” product, which will be launched in Australia later this year.

The regulators have accused the companies that dominate online advertising of draining money from traditional news organizations while using their content for free.

Big tech companies have opposed the legislation vehemently from the start, fearing it would threaten their business models.

In particular, the companies objected to rules that made negotiations with media companies mandatory and granted an independent Australian arbitrator the right to impose a cash settlement.

This possibility was greatly curtailed by last-minute government adjustments.

“Most importantly, the law encourages parties to conduct business negotiations outside the law and the government is pleased to see progress on the part of both Google and Facebook recently in reaching trade arrangements with Australian news media companies,” Treasury Secretary Josh Frydenberg said in a statement.

Google was also careful to avoid creating a precedent that the platforms should pay anyone for links, something that could make its leading search engine inapplicable.

The social networking site Facebook It is less dependent on news content He initially said being forced to pay for news was simply not worth the hassle and shut down access to news content to his Australian users.

Public interest journalism

The government said the law, called the Compulsory Bargaining Act for Media and Digital Platforms, would ensure that news companies “are paid fair compensation for the content they create, thus helping to sustain public interest journalism in Australia”.

Facebook and Google now have two more months to come to other agreements that would prevent binding arbitration.

Google has already brokered millions of dollars in deals with local media companies, including the two largest: Rupert Murdoch’s News Corp and Nine Entertainment.

Facebook on Tuesday lifted a site-wide ban on Australian news, was brought in to protest the law, and announced its first proposed deal with an Australian media company, Seven West.

Facebook and Google both said they will invest approximately $ 1 billion each in news around the world over the next three years.

Critics of the law say it penalizes innovative firms and goes so far as to extract money through struggle But it is politically linked Traditional media.

Tech insiders see the legislation being driven, in particular, by News Corp. Rupert Murdoch, which dominates the local media landscape and has close ties to the conservative Australian government.

Nick Clegg, the head of global affairs, said Thursday that the original draft of the law would have forced Facebook to pay “potentially unlimited amounts of money to multinational media conglomerates under a arbitration system that intentionally misdescribes the relationship between publishers and Facebook.”

Thousands of press jobs and dozens of news outlets have been lost in Australia alone over the past decade as the sector has seen advertising revenue stream pouring into the digital players.

For every $ 100 Australian advertisers spend today, $ 49 goes to Google and $ 24 to Facebook, according to the country’s competition watchdog.

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