Australia Introduced to Parliament Legislation to Force Tech Giants Google and Facebook to Pay for News

At a caucus meeting in Canberra, Australia, Australian Treasurer Josh Frydenberg reportedly announced that the News Media and Digital Platforms Mandatory Bargaining Code will be introduced in Parliament in the near future. 

The latest draft legislation is the first attempt to get tech companies like Google and Facebook to pay for news content used on their platforms. Tech companies have strongly opposed this, saying that they will no longer use Australian news content. However, if the content remains free (i.e. tech companies don't have to pay to use the content), then media companies who are required to pay content creators will repeatedly lose money.

"The world is watching what's happening in Australia," Frydenberg said while introducing the draft legislation.

“YouTube and Instagram are not currently regulated under the draft legislation, but will be expanded to include other digital platforms as well "if there is sufficient evidence to establish that they give rise to a bargaining power imbalance," Frydenberg said.

As Secretary of the Treasury, I have the authority to designate which services will be subject to the Act," said Frydenberg. “Google Search and Facebook's NewsFeed are the two services that will be under the Act. These services were chosen based on an unequal bargaining relationship between the platform and the media. This choice was made under much consideration, after I have received advice from the Australian Consumer Council, the Department of Treasury and other agencies."

It still remains unclear how much money other platforms will have to pay media companies to use their content. The government has not intervened in this matter either. The new bill only establishes a regulatory framework for bargaining process, but ultimately, it is up to media companies to determine the price.

The draft legislation, officially named the News Media and Digital Platforms Mandatory Bargaining Code, is likely to go through parliamentary process.

On the other hand, Facebook and Google can choose to not to use the news content. Because once they accept this in the Australian market, soon Facebook and Google will be in a similar position in other markets, including the U.S. and Europe.