Australia passes law forcing Google, Facebook to pay for news

Sydney - New law paves way for Google, Facebook to invest tens of millions of dollars in local news content deals.

Australia’s parliament passed landmark legislation Thursday requiring global digital giants to pay for local news content, in a move closely watched around the world.

The law passed easily after a last-gasp deal that watered down binding rules Facebook and Google had fiercely opposed in return for the tech giants agreeing to pay local media companies.

The new law paves the way for Google and Facebook to invest tens of millions of dollars in local content deals, and could prove a model for resolving the firms’ tussles with regulators worldwide.

Google will now pay for news content that appears on its “Showcase” product and Facebook is expected to pay providers who appear on its “News” product, which is to be rolled out in Australia later this year.

Regulators had accused the companies, who dominate online advertising, of draining cash away from traditional news organisations while using their content for free.

Big tech firms had fiercely opposed the legislation from the outset, fearing it would threaten their business models.

In particular, the companies objected to rules that made negotiations with media companies mandatory and gave an independent Australian arbiter the right to impose a monetary settlement.

That prospect was dramatically reduced by last-minute government amendments.

“Importantly, the code encourages parties to undertake commercial negotiations outside the code and the government is pleased to see progress by both Google and more recently Facebook in reaching commercial arrangements with Australian news media businesses,” Treasurer Josh Frydenberg said in a statement.

Google was also keen to avoid creating a precedent that platforms should pay anyone for links, something that could make their flagship search engine unworkable.

Facebook — which is much less reliant on news content — had initially said being forced to pay for news was simply not worth it and shut down access to news content for its Australian users.

‘Public interest journalism’

The government said the law, called the News Media and Digital Platforms Mandatory Bargaining Code, would ensure that news businesses “are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia”.

Facebook and Google now have an additional two months to reach further agreements that would stave off binding arbitration.