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The Australian Competition and Consumer Commission was commissioned by the government earlier this year by developing a mandatory code for technology giants to pay for the use of news content. If agreed, draft code announced by the ACCC on Friday will allow Australian outlets to secure payments in a matter of months.
It aims to address “acute bargaining power imbalances” between news groups and Google and Facebook, the ACCC said. Under the rules, if the publisher and digital platform cannot agree on an agreement after three months of formal talks, will the “final bid” arbitration process be carried out? initiates that the results in the selection of bids “make the most sense” in 45 working days.
“Changes to our rules are designed to create a fair and just playing field,” Australian Treasurer Josh Frydenberg said Friday. “We want regulations in the digital world to reflect regulations in the physical world. We want to ensure increased consumer protection, increased competition and of course we provide a sustainable media environment for all Australians for the future.”
This step could make Australia the first country to force Google and Facebook to pay for news content. It happened after talks between online platforms, ACCC and media companies failed to produce an agreement.
It is not yet clear how much development will impact Google and Facebook’s revenue. Google’s parent company, Alphabet reports the first decline in income in history in Thursday’s second quarter earnings report, while Facebook posted an 11% increase in income. Both companies have been under regulatory spotlight lately, with their CEO appearing alongside Amazon and Apple bosses inside Congress antitrust trial on wednesday.
The draft code will be consulted for a month before being discussed in parliament. If approved, it is expected to be reviewed within one year.
Google said it was “very disappointed and concerned” about the draft mandatory ACCC code.
“This code discounts the significant value that Google gives news publishers across the board – including sending billions of clicks to Australian news publishers free of charge annually for $ 218 million,” Mel Silva, managing director of Google Australia and New Zealand, said in a statement. Friday statement.
“This sends a message about businesses and investors that the Australian Government will intervene rather than let the market work, and undermine Australia’s ambition to become a leading digital economy by 2030. The Australian Government sets a misguided disincentive to innovate in the media sector and doing nothing can solve challenges fundamental in creating business models that are suitable for the digital age. “
William Easton, managing director of Facebook Australia and New Zealand, said the company is currently “reviewing the Government’s proposal to understand its impact on the industry, our services, and our investment in the news ecosystem in Australia.”
Last month, Google said it would do it pay a number of publishers in Australia, Germany and Brazil directly to license their content, as part of a new service that is expected to be launched later this year. This marks a change in tactics for the internet giant, which for years has fended off demands from news organizations to pay for the distribution of their work.
The French competition regulator decided in April that Google must pay publishing companies and news agencies to reuse their content. Such regulatory pressures have increased as news outlets grapple with a sharp drop in advertising spending due to the coronavirus pandemic.
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