Australia according to new reports is planning to force both Facebook and Google to share advertising revenue with local media firms according to the country’s treasurer on Monday. This is will make Australia the first country to require digital platforms to pay for content use.
Josh Frydenberg, who is the country’s Treasurer said that the move comes after talks with the big tech titans failed to yield a voluntary code to address complaints by domestic media players who said the companies have too tight grips on advertising which is their main sources of income.
“We understand the challenge that we face, this is a big mountain to climb,” Frydenberg told reporters in Canberra. “These are big companies that we are dealing with but there is also so much at stake, so we’re prepared for this fight.”
This had prompted the country’s government to enforce the Australian Competition and Consumer Commission (ACCC) to frame a mandatory code of conduct between media outlets and digital platforms after talks stalled on content payment rules.
Initial plans were scrapped in order to come up with a voluntary code by November and the country’s government had required the ACCC to submit a draft its mandatory code by July which will be passed to legislation shortly afterwards.
Frydenberg said the mandatory code will also include sharing of data, ranking and display of news content and the sharing of revenue generated from news, adding that there will also be penalty and binding dispute resolution mechanisms.
Australia’s online advertising market is worth about almost A$9 billion ($5.72 billion) a year and has grown more than eight-fold since 2005.
So for every A$100 spent on an online ads in Australia excluding classified ads, almost third goes to Facebook and Google according to an ACCC report on digital platforms published in June of 2019.
By December of 2019, the Australian government had told Google and Facebook to agree on new rules which will ensure they do not abuse their market power and damage competition or the government will impose new controls.
Facebook expressed dismay at the government move on Monday.
“We’re disappointed by the government’s announcement, especially as we’ve worked hard to meet their agreed deadline,” Facebook said.
“We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry,” Facebook Australia and New Zealand Managing Director Will Easton said in an emailed statement.
Google said it would continue to cooperate with plans for the media code of conduct.
“We have sought to work constructively with industry, the ACCC and government to develop a code of conduct, and we will continue to do so in the revised process set out by the Government today,” a Google spokesperson said.