Australia to Force Google & Facebook to Pay Local Media for Content

Josh Frydenberg, Australia’s treasurer, recently announced that the country will pass legislation within months forcing Facebook Inc and Alphabet Inc’s Google to share advertising revenue with local media firms.

Frydenberg has ordered that country’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), to create a code of conduct for Facebook and Google as soon as possible. The decision comes as a consequence of Facebook and Alphabet’s failed attempts to yield a voluntary code with the Australian government to address complaints by domestic media players.

Frydenberg detailed:

On the fundamental issue of payment for content, which the code was seeking to resolve, there was no meaningful progress. It’s only fair that those that generate content get paid for it.

We understand the challenge that we face, this is a big mountain to climb. These are big companies that we are dealing with, but there is also so much at stake, so we’re prepared for this fight.

According to the treasurer, Australia’s online advertising market is worth $9 billion a year, up eight folds since 2005. For every $100 spent on online advertising in Australia, aside from the classifieds, one-third of the revenue goes to Google and Facebook.

ACCC Chairman Rod Sims, talking about the matter, said:

The problem with that is that some of that information they are providing consumers for free has come from people who have invested a lot of money in journalism and the case of media to provide that content.

Google and Facebook have completely different takes on the matter. Expressing its dismay with the Australian government, Facebook said:

We’re disappointed by the government’s announcement, especially as we’ve worked hard to meet their agreed deadline. We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships, and training for the industry.

Google, on the other hand, is ready to cooperate with the authorities. Google’s spokesperson told the media:

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.

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