Australia passed a legislation on Thursday which would force Facebook and Google to pay for Australian news.
The world-first law passed easily after the Australian government agreed to water down elements most fiercely opposed by the tech giants, in return for both agreeing to negotiate paid deals with local media.It paves the way for Google and Facebook to plough tens of millions of dollars into struggling local media companies, and could provide a model for resolving tussles with regulators worldwide.The government said the law would ensure that news businesses “are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia”.Google has already brokered deals worth millions of dollars with Australian media companies, including the two largest: Rupert Murdoch’s News Corp and Nine Entertainment.A more reluctant Facebook — which briefly slapped a site-wide ban on Australian news in protest at the law — has inched towards a first deal with Seven West, and said more negotiations are on the way.
So long as these deals go ahead, the tech firms will avoid being told who and what to pay by an arbiter, and their most profitable products such as “search” will be ring-fenced.
The agreements mark a new foray into content payment for Facebook and Google, who became two of the world’s largest and most profitable companies largely by organising, curating and indexing others’ content cost-free.
Facebook and Google have each said they will invest around US$1 billion in news around the world over the next three years.
Google will pay for news content that appears on its “Showcase” product and Facebook is expected to pay providers who appear on its “News” feature, which is to be rolled out in Australia later this year.
The legislation is seen as an opening salvo in the battle between Big Tech and regulators, who have watched the companies grow from start-ups to digital conglomerates with only light touch regulation.
Their tussle began with an investigation by Australia’s consumer watchdog into Google and Facebook’s online advertising dominance, which has drained cash away from traditional news organisations.
