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.”

Michael Miller_M360 2018


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.


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