Australia has passed the News Media Bargaining Code, which aims to make tech companies like Facebook and Google pay news publishers for content.
The code had passed Australia’s House of Representatives last week but still needed to clear in the country’s Senate. Now, with Senate approval, the code is on the way to become law.
The law aims provide incentives for tech giants, such as Google and Facebook, to strike deals with Australian news providers for content published on the tech companies’ platforms. Failure to do so would drive the companies into arbitrations.
According to Australian authorities, this will provide additional leverage for the country’s media companies, as the final decision on the value of news would be taken by the arbitrator.
However, new amendments to the law mean that it is possible for Facebook and Google not to be subject to the deal. The platform’s existing contributions to journalism, including any commercial deals made with publishers, will now need to be considered before applying the code.
In addition, the tech companies will need to receive a month’s notice before any instances of the code being applied to them.
The move drew fierce criticism from both Facebook and Google, the main targets of the law. Both companies raised concerns about government intervention in the free market.
Facebook wanted a six months’ grace period to negotiate deals with news companies directly before mandatory regulations apply. Meanwhile, Google claimed that user data could be handed over to big businesses and warned that its free search service would be “at risk”.
Both companies previously threatened to ban Australian news content from their platforms as the code moved forwards. Google even tested blocking about 1% of Australian users from seeing news content on its search engine to determine the value of its service to Australian news outlets.
Only Facebook went ahead with the ban, preventing Australian users from viewing news content on its platform last week.
However, this led to media criticisms of the social media giant. Around a week later, Facebook announced that it would restore access to news content in a sign that it was backing down.
The company reversed its position after talks between Australian Treasurer Josh Frydenberg and Facebook head Mark Zuckerberg took place. Frydenberg said after the meeting that the law will receive some amendments.
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According to Facebook VP for Global Affairs Nick Clegg, the company may have overstepped its authority with the ban. “But when it came, we had to take action quickly because it was legally necessary to do so before the new law came into force, and so we erred on the side of over-enforcement. In doing so, some content was blocked inadvertently.”
Google meanwhile chose to strike its own deals with Australian media companies before the law came into force. These included multi-million dollar deals with international media group News Corp., along with local media giants Seven West and Nine Entertainment.
Both companies have created separate news platforms, Google News Showcase and Facebook News Tab. These involve the companies paying news organisations for curated news content on the apps.
However, these platforms are separate from Facebook’s main platform and Google’s search functions.