Both Google and Facebook control a significant portion of the internet and the ads that run on it. The Australian government doesn't like that.
This is why the government wanted to the two tech giants to pay media companies for the right to use their content on its search results or news feed.
It was Australia’s Competition and Consumer Commission (ACCC) that drafted the law, believes that law can address the “significant bargaining power imbalance between Australian news media businesses and Google and Facebook.”
And this time, the Australian government has finally passed that law.
“This is a significant milestone,” said Josh Frydenberg, the Liberal party’s deputy leader who spearheaded the new law. “This legislation will help level the playing field & see Australian news media businesses paid for generating original content.”
Read: Google Threatens To Pull Its Search Engine From Australia If Forced To Pay For News
The law that is called the News Media Bargaining Code, requires both Google and Facebook to pay a negotiated fee to link to or use news content, and includes a mandatory arbitration process if an agreement on fees between the parties can’t be reached.
The law also requires tech companies to give advance notice to news organizations about upcoming algorithm changes.
This is something both Google and Facebook had hoped to avoid. Neither of the two expect or want an independent body to decide the value of news content in news feeds and search results.
Having seen fierce opposition from both Google and Facebook, the government is certain that the law won't affect Google’s search business nor Facebook'.
Among the two, Facebook is the most vocal.
The social giant blocked users and publishers from sharing news content on its main social network, and only relented after the Australian government agreed to make a series of amendments to the proposed law.
"After further discussions, we are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them," Facebook said in a news post.
As for Google, the company was also furious that has threatened to pull its search engine from the country if the law came into force. But it later walked back its plans, and chose to settle with media organizations to pay them for news content.
“The law would unfairly require unknown payments for simply showing links to news businesses, while giving, to a favored few, special previews of search ranking,” said Kent Walker, Google’s global policy executive, in a blog post.
“Those aren’t workable solutions and would fundamentally change the Internet.”
Initially or at least at this time, the law only targets Google and Facebook specifically. But in the future, the Australian government can expand the law to target other platforms as well, “where fundamental bargaining power imbalances with Australian news businesses emerge.”
What's more, amendments to the law mean the Australian government can also take into account any commercial agreements that were made between a tech company a news publishers, before formally designating it as a platform under the code. The law is due to be reviewed a year after it comes into effect to see its impact.
The ACCC thinks that the law is needed after seeing 18-month inquiry that found tech giants were taking a disproportionately large share of online advertising revenue, which it believes comes at the expense of media organizations.
And that happened even before the 'COVID-19' coronavirus pandemic.
Because Australia's media industry is hit hard because of this crisis, with more than a hundred local newspapers across the country are either laying off their employees or stop printing, or shutting down completely, the law is designed to help them.