Digital platforms like Google and Facebook will have to pay for news content under new laws proposed by the government.
A draft code of conduct released on Friday outlines how media companies could bargain with digital platforms for the paid use of their content in what the Australian Competition and Consumer Commission (ACCC) has described as a measure to address “power imbalances” between news media and tech giants.
Treasurer Josh Frydenberg admitted the Coalition government had not adequately kept up with the rise of digital platforms in the Australian media landscape over the past decade.
“As the tech has developed, and as the power, wealth, and influence of these digital platforms – namely Google and Facebook – has grown, our regulatory framework has not kept up,” Frydenberg told a press conference on Friday morning.
“What we have sought to do is create a level playing field to ensure a fair go for Australian news businesses.
“We want Google and Facebook to continue to provide their services for the Australian community; but we want it to be on our terms, we want it to be in accordance with our laws, and we want it to be fair.”
News media businesses that enter into bargaining agreements with Google and Facebook will be assessed by the Australian Communications and Media Authority (ACMA) to ensure they publish news online, are mainly serving an Australian audience, are subject to “a professional editorial standards regime”, and have a revenue over $150,000.
Companies can bargain either individually or collectively and have three months to come to an agreement before compulsory arbitration begins.
Under the draft code, digital platforms will be required to alert news companies within 28 days of any algorithmic or policy changes that could affect the ranking of their content.
News companies would also have the option to opt out of having their content shared on the platforms.
ACCC Chair Rod Sims said it was important for news organisations to be fairly compensated for the content they incidentally provide to Facebook and Google environments.
“News content brings significant benefits to the digital platforms, far beyond the limited direct revenue generated from advertising shown against a news item,” he said.
“News media businesses should be paid a fair amount in return for these benefits.”
Google was scathing of the draft code.
In an email statement, Google Australia Managing Director, Mel Silva said she was "deeply disappointed" with the government's decision.
"The code discounts the already significant value Google provides to news publishers across the board – including sending billions of clicks to Australian news publishers for free every year worth $218 million," Silva said.
"It sends a concerning message to businesses and investors that the Australian Government will intervene instead of letting the market work, and undermines Australia’s ambition to become a leading digital economy by 2030.
"It sets up a perverse disincentive to innovate in the media sector and does nothing to solve the fundamental challenges of creating a business model fit for the digital age."
It found that Facebook and Google were “unavoidable trading partners” for many news organisations who rely on the tech giants to help deliver content to audiences.
Unfortunately for news organisations, Google and Facebook have also swept up revenue as advertisers turn to tech giants to get their messages to more specific audiences.
The ACCC warned that the loss of advertising revenue means news media businesses “have struggled to survive and have reduced their provision of news and journalism” – a trend exacerbated by the coronavirus pandemic which has helped see over 150 news rooms shut down across the country since January, and costing hundreds of jobs.
Australia's journalist union, the Media and Entertainment Arts Alliance (MEAA), warmly welcomed the draft code.
"For nearly two decades Google and Facebook have built enormous fortunes off the back of aggregating content that others have made and others have paid for,” said MEAA Media President Marcus Strom.
"It is a business model that has literally destroyed newsrooms around the world. It is time that free lunch comes to an end.”
The public consultation period for the draft code of conduct ends on August 28.