Facebook and Google set to be told to pay for news under new legislation
Australia will attempt to become the first country to force Facebook and Google to pay for news, the government has signalled.
Treasurer Josh Frydenberg today called off attempts to broker a voluntary code between the traditional and digital media and tasked the Australian Competition and Consumer Commission with creating a mandatory code after “insufficient progress” was made with the voluntary code.
The move comes days after News Corp boss, Michael Miller, warned that no progress was being made in talks with the digital giants.
Frydenberg said the code will attempt to “level the playing field”
“On the fundamental issue of payment for content, which the code was seeking to resolve, there was no meaningful progress and, in the words of the ACCC, ‘no expectation of any even being made,” Frydenberg wrote in The Australian today.
“It is only fair that the search engines and social media giants pay for the original news content that they use to drive traffic to their sites.”
The code, a draft of which should be ready for comment by the end of July, with legislation to follow, will address revenue sharing, the transparency of ranking algorithms, access to user data, presentation of news, and penalties for non-compliance.
Frydenberg added: “For every $100 spent by advertisers in Australia on online advertising, excluding classifieds, $47 goes to Google, $24 to Facebook and $29 to other participants. In Australia, this market is worth almost $9bn a year and has grown more than eight-fold since 2005.
“We are not seeking to protect traditional media companies from the rigour of competition or technological disruption.
Frydenberg with PM Scott Morrison
“Rather, to create a level playing field where market power is not misused, companies get a fair go and there is appropriate compensation for the production of original news content.”
Facebook said it was “disappointed” with the decision, “especially as we’ve worked hard to meet their agreed deadline”.
“COVID-19 has impacted every business and industry across the country, including publishers, which is why we announced a new, global investment to support news organisations at a time when advertising revenue is declining,” said Will Easton, managing director of Facebook Australia and New Zealand.
“We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem. We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry and hope the code will protect the interests of millions of Australians and small businesses that use our services every day.”
Frydenberg did not spell out what Facebook and Google would be expected to pay out, referring only to “value exchange and revenue sharing”. The code would also attempt to force Google to share details of how its search algorithms work.
And he acknowledged that legislation might not be successful, conceding that a similar move in Spain saw the closure of the Google News service instead.
The announcement was welcomed by Australia’s news providers, with News Corp, Nine and Seven West Media all putting the announcement on the front pages of their metro and national titles.
News Corp’s Miller said in a statement:
“For two decades, Google and Facebook have built trillion dollar businesses by using other people’s content and refusing to pay for it.
“Their massive failure to recognise and remunerate creators and copyright owners has put at risk the original reporting that keeps communities informed.
“The decisive move by the Australian Government to go directly to a mandatory code of conduct between the international tech giants and Australian news media companies is a vital step that can help secure the future of Australian journalism.”
Miller
The code follows last week’s announcement of an urgent government relief package – including suspended content quotas, $41m in tax rebates, and a $50m regional journalism program – to attempt to mitigate the financial pressures media companies are facing due to COVID-19.
News Corp has suspended its community print titles (Miller has admitted that “we don’t know where they’re going to end up”) and moved staff to nine-day fortnights, Nine has ceased production on a number of print sections and plans to deliver $200m in cost cuts this year, and Antony Catalano’s Australian Community Media has paused non-daily titles, closed four press facilities, and stood down staff.
Pay cuts, reduced hours, forced leave arrangements, stand downs, and redundancies (either resorted to already or forewarned) have been commonplace across the industry.
Nine chief executive Hugh Marks congratulated the government on the mandatory code, and added that “it’s important the global technology companies take some responsibility for contributing to our society through financially supporting the creation of quality Australian content”.
Marks told 3AW Breakfast’s Ross Stevenson and John Burns this morning that “it’s about time”.
Nine CEO Hugh Marks
“This is all about sharing the burden between all those players in a more fair way,” he said.
“[Digital platforms have] sort of dragged their feet on that opportunity [to develop a voluntary code]. So what the government’s done today is said ‘Enough. You’re not taking this seriously. We’re going to impose a mandatory code’.”
Marks added that the code’s positive impact to Nine’s bottom line will be “reasonably material”.
Free TV CEO Bridget Fair believes the voluntary code negotiations were “essentially a delaying tactic for the digital platforms in the hope that these issues would blow over”, and welcomed the “groundbreaking” decision.
“Commercial broadcasters are currently experiencing tectonic forces pulling in opposite directions – record numbers of viewers tuning in to a trusted free service and at the same time a huge hit to their ability to pay for the content viewers value so highly,” Fair said.
“And the inability of Australian media companies to negotiate fair value for their content with global digital platforms is a big part of that equation.”
The code was just one of many recommendations made by the ACCC in its 623-page Digital Platforms Report, the culmination of an 18-month inquiry into Facebook and Google. Since the report’s release mid-last year, the watchdog has commenced a further five year inquiry into the platforms, in addition to a separate inquiry into the ad tech supply chain.
Frydenberg explained that a lot of work will be required over the next three months to get the draft code ready for the end of July, but adhering to that timeline is essential for the wellbeing of news companies.
“There is too is much at stake — nothing less than the future of our media landscape,” he said.
Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
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And yet anyone with even a basic understanding of digital marketing and new publishing will understand that nether Facebook or Google generate news… they generate traffic to news sites.
This is such a blatant online play to funnel more money to the government’s propaganda partners. Level the playing field? How many independent publishers will get a cut? This will almost all go to News Corp and Nine. It needs to be called out.
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In the post COVID world, everyone will have to pay their tax.
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too many tech companies get away with plagiarism and abusing public property under the guise of solving problems no one thought they had. I hope more policies of this nature are implemented. It’s only fair.
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They are platforms not media companies. I am yet to see a news article written by Google or Facebook. I don’t see much daily content from them either…
I have however seen every radio and television station in this country drive traffic from both platforms to their own websites and news content… maybe it’s time all the incumbents start paying their fair share and quit complaining they underestimated the new kids back in the mid-2000’s
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100% agree. This is a farce!
It goes to show that the Government and ACCC don’t have any understanding of Digital.
All of these news outlets should immediately delete their FB business Pages, Communites,
No more breaking news items and the Ho live function.
Oh and with Google. Add the No-index tag to your code. Pretty simple isn’t it?
Embarrassing!
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Google doesn’t explicitly profit of the actual content. Rather the search engine creates an arbitrage opportunity by creating an additional step (no matter how much benefit and time it is for the end user).
How about Google pays a rev share on search revenue on relevant news-related search terms? Ie. search results that highly rank news articles / publishers based on their Search algo.
If publishers want a CPC rev share on traffic generated, then pubs should agree to Google controlling the environment – such as referring to a native Google News UI, or AMP only with AdSense/AdX only.
Facebook is less reliant on the former case, so the latter could apply via Instant Articles with FAN only.
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Hi,
Have you read the ACCC digital platforms report? It finds that both companies monetise the media’s content and are unavoidable business partners for those companies.
When we look at the decline of revenue for traditional media they obviously have some culpability but when two companies are taking more than 100 cents in every new digital dollar then the playing field rules are clearly broken…
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This will be far from perfect – no matter what the final details – but at least it’s action, and a start. The pertinent question to ask of the many digital naysayers is “so if not this, then what?” To date, their contribution to any practical recommendations has been unforthcoming.
In 2019 the World Federation of Advertisers published a Global Media Charter: read it at https://wfanet.org/services/connect-to-your-peers/global-alliance-for-responsible-media/overview. Topline: ‘Free’ is too good to be true – well I never! – and ultimately you always get what you pay for. Fake news, fake views, ad fraud, data piracy, brand safety and agency liquidity – it is ALL connected.
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This has all the hallmarks of legacy news publishers exercising their political muscle.
This is not an ACCC issue, but a taxation issue. When the tech platforms are issuing invoices from Singapore and Dublin anyone can tell you that there is not level playing field with local operators – whether they are print or digital, old or new players.
Every news publisher can block their content from search engines and social media today, but they are addicted to the cheap traffic.
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What exactly are these guys stealing? Last I saw there were no full news articles on Google or Facebook. They actually help me find news. Is the problem that the news source base is no longer just News Corp and Fairfax/Nine and that they don’t like it? The internet eroded the value in a news bundle based business model, not Facebook and Google.
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You can imagine a world where this new tax becomes so punitive that Facebook and Google say stuff it and remove any news links on their services. Next Michael Miller will be asking the government to force the tech players to list their content!!
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What you’re (the ACCC) is describing is the internet and every business on the planet. That ship left long ago. If they’re going to compensate their media partners then what about every shop/store/service that has been butchered by online? Is Amazon the next target? Will they be paying out to Harvey Norman, Myer and DJs?
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They should absolutely do this.
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Turns out that when the same thing happened in Spain, Google simply shut down Google News in Spain. That would be catastrophic for many independent publishers here, but maybe good for NewsCorp. Either way, it’s nothing whatsoever to do with a level playing field. https://www.theguardian.com/world/2014/dec/16/google-news-spain-publishing-fees-internet
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I’m not actually sure how this will work in practice? I’m also concerned that it will result in limiting access to Facebook and Google in Australia, forcing a less open market on consumers and driving a black market in content sharing. It feels like a case of too little too late.
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Let’s also introduce a tax on turnover rather than profit to stop companies from shifting profits to low tax jurisdictions.
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It would be interesting if Google’s response will be to just block all relevant publisher content, just to see the expression of Murdoch’s face.
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But they’re not platforms. They’re a hybrid that claims best of both
Platform scale but with the influence of media.
They would be a platform if they acted like a Telco e.g. do not edit the content. Anyone can connect to anyone else.
But they use recommendation algorithms to influence behaviour and collect ad revenue – clearly a media company.
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Just like how Google pays 0.000047c per view to a musician whose song is played on YouTube, publishers should get a similar amount per 3-7 minutes of content.
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Meanwhile, news organisations have no problems scraping twitter, facebook, google and free user-submitted photos or articles for their ‘content’.
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If this is really about protecting news and journalism, why should the policy be about News Corp and Nine advertising revenues? The ABC already has a role of keeping Australian’s informed and is a leading news site online. Yet LNP is doing opposite in this case and cutting their funding? Shouldn’t they be increasing during COVID? Which just looks like a free pass for Murdoch and their LNP propaganda machine.
Google and Facebook deliver link referrals and it’s healthy that people are sharing their premium news articles on platform for these sites. The decline of revenue of News Corp / Nine sites is simply that their advertising solutions (mainly display banners / high costs) aren’t effective in driving results for clients. Whereas Google and Facebook are essential for advertising and driving business results? This is a simple marketing effectiveness equation. News content has nothing to do with their success as people use Google/Facebook for other purposes than news.
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Can anyone explain how this will actually work?
Sounds like a lot of ‘intention to’ with no little or no detail or framework
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Let me get this straight? Costello, Murdoch and Stokes have had a word with their LNP mates because they have not advanced their own business models?
This is farcical.
Advice to Google / Facebook: turn them all off: They will evaporate.
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So what about when I try to read a news article and the publisher expects me to pay for it.
Thanks to Facebook I have digital subscriptions to 4 newspapers.
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Is there a way to shape this initiative in a way that could also curtail propaganda or fake news?
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As they did in Spain.
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Does anyone know whether the removal of Google News is Spain miraculously turned around the ad revenues of the legacy news outlets? Some data from the experiment would be helpful to predict the real impact of the Google/FB layer on the publishers business model.
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This may answer your question although it is a report from a North American newspaper alliance.
http://www.newsmediaalliance.o.....1-7-19.pdf
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What am I missing here?
Google I understand – people search for something, and rather than driving a click to a publisher to read the full article (allowing the publisher to make revenue), you’ll often get what you need from the snippet in the search results – they should pay a clip for that.
Yet Facebook is showing the news the news publishers actually put up on FB- is there another FB news aggregator that is ‘taking’ news from publishers- rather than from those publishers actual pages?
Yahoo gets most of its traffic from FB these days- if that changes they, and other publishers will be cactus.
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For Josh Frydenberg and ACCC who don’t understand the internet. Making Google pay publishers for search listing would be like forcing the whitepages to pay businesses to list them.
In case of Facebook feed, it’s people sharing links to articles with friends or the news publishers posting themselves. If publishers are worried about previews of headlines, they must be worried about the front page of their newspaper appearing in the shop window?
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Yeah I don’t see how that makes sense. This is mostly a move made so that the press and tv news outlets which are pretty much dead, get some of the sweet, sweet social media revenue. Also, the fact is that people is the ones that share the news and articles, not the Facebook staff. You’d be pretty much going in a crusade against people which in turn will kill even more the orthodox news apparatus.
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What rot.
Google and Facebook aren’t stealing anything. They bring news articles to the attention of the users of their services and then direct those users to the news sites. This is only a small part of the service they offer.
They aren’t stealing anything; they make money from advertising revenue on their sites.
When a user is directed to an actual news site the news site then has an opportunity to earn advertising dollars. If they fail to do so that’s not Google’s fault or Facebook’s fault; they sent them customer, if the news site didn’t take advantage than it’s to blame. Or, and more commonly for some of them, they tried to make too much money from the visiting customer and drove them away.
With the rise of the internet the potential readership for news organisations has increased 10 fold at least (millions of times more for small publishes) but they still want to make at least just as much money from each reader. Actually they now want now for less. They are no longer supplying the physical media, the customer supplies his own and at much greater cost than a newspaper or magazine would cost – that already means they will want to pay less for the articles. Are the publishes prepared to pay the devices manufactures for use of the physical media they created? I expect not. Are they prepared to pay the services providers for delivering their content? No again. Currently it’s the reader who is paying for all the data transmission.
Media companies have always been insanely profitable, much more so than other industries. The Murdoch’s of the world have taken a big chunk of that profitability for their personal wealth; that’s how Murdoch got so rich. That’s what his real beef is.
With no physical media involved production and distribution costs have been slashed.
With no physical media involved the reader, after having read an article, has nothing to show for it. No paper to use as a rain shield, no paper to use as padding when packing valuables, no paper to user to start the wood barbecue or wood fireplace. No paper they can sell to someone else to recoup some of the cost or to just giveaway to a friend.
A digital article is then not worth nearly as much to consumers as an on paper one.
Additionally readers are not getting as much from the news services these days. No one does crosswords or puzzles in newspapers anymore and they won’t do them on news sites – those days are over. There are now dedicated better alternatives online. Similarly for social commentary – letters to the editor is a anachronism in the modern world; social commentary is done on social media – where it’s not edited, or worse excluded, to suit the political partisanship of the editor/owner.
No one goes to a publisher to see what’s on TV anymore or what movies are showing, or to see a page 3 girl in a bikini. Those days are over.
If you want to know what’s happening in personality X’s life you don’t buy a magazine, you read their blog, their website, their Twitter account, their Facebook account, the fan sites.
In short publishing just doesn’t have the value it once did. Industries die. There is still a place for news and journalism not not for billionaire news media moguls.
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