Australian Landmark Law Passes, Big Tech to Pay for Content

Australia’s parliament passed the first law of its kind, requiring Facebook and Google to pay local publishers for news content on their platforms. Treasurer Josh Frydenberg noted that, “the code is a significant microeconomic reform, one that has drawn the eyes of the world on the Australian parliament.” In fact, Australia Prime Minister Scott Morrison had discussed the new law with leaders of Canada, France, India and the United Kingdom. Facebook recently pledged to spend at least $1 billion over the next three years to license news content.

Bloomberg reports that Google and Facebook opposed the legislation, which took years to wend its way through the system. After the government spoke with Facebook chief executive Mark Zuckerberg, Australia made a few concessions: the two Big Tech companies “are free to decide themselves which commercial deals to pursue … and if the government decides they’ve made a sufficient contribution to the local news industry, they won’t be designated under the law.”

The law also states that, “if the government does decide to apply the code, the companies will be given one month’s notice, and will also have more time to strike deals with media publishers before they’re forced into final-offer arbitration as a last resort.”

Prior to the law’s passage, Facebook temporarily “switched off news in Australia because the legislation misunderstood the company’s relationship with publishers.” Now, said Facebook vice president of global affairs Nick Clegg, the company looks “forward to agreeing to new deals with publishers and enabling Australians to share news links once again.”

He explained that, “media businesses voluntarily post news on Facebook, which helps them reach a larger audience” and that “just 4 percent of the posts that people see in Facebook’s News Feed are news.”

The Wall Street Journal reports that the new code “compels tech companies and news publishers to submit to binding arbitration if they can’t reach a deal on payment,” and requires “an additional round of negotiation before binding arbitration kicks in, as well as more acknowledgment of any deals Facebook reaches with publishers on its own.”

Google, in the meantime, has signed content deals with News Corp and Dow Jones & Co. It also launched News Showcase and inked deals with 500+ publications in a dozen countries and set aside $1 billion over three years for licensing deals. After speaking with Australia PM Morrison, Canadian Prime Minister Justin Trudeau said that, “his government intends to introduce measures.”

Elsewhere, WSJ reports that Facebook’s pledge to spend $1 billion over three years for news content is in addition to “$600 million that Facebook paid since 2018 in deals with publishers like The Guardian, Financial Times and others to populate its Facebook News product in some countries.” Clegg stated that the company “intends to strike deals with news publishers to have their stories appear on news products it is developing.”