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Google, Facebook must pay for news in Australia: What is media bargaining code, how it effects Big Tech


A draft law was drawn up in July last year, and on February 25, the country passed the law. (Image: Reuters)

Australia law for Facebook, Google news: Australia has been at odds with tech giants Facebook and Google for months now over its move to bring a law mandating Big Tech to pay media houses for the news content that they produce (and that is posted on Facebook and features in Google, Search et al).

A draft law was drawn up in July last year, and on February 25, the country passed the law. Ahead of this, Google had threatened to shut down its search engine in the country while others like Microsoft had supported the move, even offered to step in to fill the void if Google were to shut its search service in Australia.

What is Australia’s News Media Bargaining Code?

The Bill that has been passed by the Australian Parliament and has now effectively become a Code is called the News Media and Digital Platforms Mandatory Bargaining Code. The code aims to help news providers earn by directing services like Google and Facebook to pay for using their content on their websites.

It provides for a negotiation between the news organisations and the tech giants regarding payment deals. The code ultimately aims to make the tech giants remunerate and consequently encourage local news organisations, by balancing out the power between the two sides, because news organisations for long have been in a disadvantageous position due to their high dependence on such platforms for traction, according to market regulator Australian Competition and Consumer Commission (ACCC).

In cases where bilateral negotiations fail, the code also states that an independent arbitrator can also set the price that the tech giants would be required to pay to the media organisations. As per the code, the tech giants would also be required to inform news organisations of any changes in their algorithms that would impact the stories that were being displayed.

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The code was also amended, before being passed, to include the clause that the government would take into consideration the existing contributions of these platforms to journalism, including commercial partnerships, before it decided to apply the code to them. Moreover, the government would also give the platforms a month-long notice if it considered applying the code to them.

These amendments were made after Facebook took down some of its news pages, which it assured it would restore once the amendments were made.

Facebook and Google’s stance on the code

Both Facebook and Google have been vocally critical of the code, asserting that their platforms helped news organisations get traffic, thus eliminating the need for them to pay the organisations. For months, both the platforms sought to get the Australian government to not pass the code, before Google said that it would shut down the services of its search engine in the country, while Facebook banned the news content in the country, making Australian news pages unavailable.

In a statement issued recently, Facebook stated that as an alternative, it was willing to invest at least $1 billion in partnerships with news organisations over the next three years, in addition to the $600 million it had already invested since 2018 in the industry. It cited examples of the partnerships it had forged with several prominent news organisations in the UK to pay them for the content they feature in the Facebook News tab in the European country, indicating that it could bring something similar to the publishers in Australia, if not for anything else then to bypass the application of the Code to them.

On the other hand, Google said that it did not want legislative interference because it would “break the fundamental principle of the web”. It also asserted that it had been carrying out several programmes to invest in journalism, and also announced a new “constructive path” that would support journalism.

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The Google News Showcase programme has been announced by the search engine giant which would enable regular payments to the news publishers from the tech giant, thus absolving Google from the need to pay for the links it features. Google News Showcase lets publishers curate their stories across the services offered by Google, like News and Discover, with users being able to see panels that the publishers would create themselves. These panels, Google said, would also contain some news content that is kept behind the paywall by the publishers, so that the users would be more informed. Google added that within less than a month, over 70 Australian publications had signed up to the platform.

Support for Australia’s Code

While Google and Facebook actively criticised the Code, tech giant Microsoft came up in support of the law, saying in a statement that the company was committed to supporting news publishers in Australia. When Google threatened to revoke the search engine services, Microsoft had stepped in to volunteer its services instead, hoping that that would spur the government in Australia to go ahead with the code, which Microsoft believes “reasonably attempted” to address the imbalance of bargaining power that existed between Australian news businesses and digital platforms.

Soon after, Microsoft had also batted for other countries across the world to bring into force a similar law, especially urging the newly elected US President Joe Biden to bring in a similar legislation in the country, rather than following in the footsteps of predecessor Donald Trump and opposing the code.

Moreover, countries like the UK and Canada, and the entire European Union, have also expressed their support for the law that Australia has enacted. This means that Facebook’s move to block news content could also be seen as a warning sign for these countries of the tech giant’s retaliation against any such law that they were to bring in.

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Google, Facebook fall in line

A day after the Australian Parliament passed the law, Facebook announced that it had signed preliminary agreements with three news publishers in the country, with letters of intent having been signed with Solstice Media, Schwartz Media and Private Media. The full agreements would signify the official completion of partnership, and it would be done within the next 60 days, the tech giant said, adding that this would allow these companies to bring even some of the previously paywalled content to Facebook, making this something in line with Google’s solution to bypassing the law creatively.

On the other hand, while Google has not announced any major development after the passing of the law, in the weeks leading up to the passing of the law, the search engine giant was signing commercial deals with big media companies in the country, including Rupert Murdoch’s News Corp. and Seven West Media. Moreover, with names like The Canberra Times, The West Australian and The Saturday Paper being onboard the Google News Showcase platform, Google is hoping to escape having to pay the media organisations on a per-link-click basis.

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