Facebook and Google to Pay for News — Australia Passes New Law

By McKenzie Carpenter Thursday, February 25, 2021

Two of the largest tech companies in the world, Facebook and Google, have been in a battle with the Australian government over whether or not each tech company should pay for news media content. On Thursday, the Australian parliament passed a law that will require each tech business, Facebook and Google, to pay for news content.

Computer screen displaying Google and Facebook browser windows

Australia’s New Law

The Australian parliament voted and passed a new law that will force the social media company and search engine business to officially pay for news content. Australian Treasurer Josh Frydenberg and Communications Minister Paul Fletcher released a joint statement that said the purpose of the law is to “...ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia.”

The bill for the law was first introduced to the Australian House of Representatives in December 2020 and finally passed last week. After working through some amendments, the Senate approved the law today.

Australian Competition and Consumer Commission Chair Rod Sims, who helped draft the law, added, “The purpose of the code is to address the market power that clearly Google and Facebook have. Google and Facebook need media, but they don’t need any particular media company, and that meant media companies couldn’t do commercial deals.”

Furthermore, the legislation was designed to reduce the bargaining power of each tech business in negotiations with Australian news providers, so that each company could not abuse its power. Additionally, an arbitration committee would step in if necessary.

Each tech company has been lobbying against the bill since the idea was brought up last year. Consequently, the new law has been met with a ton of resistance from each tech business. Startup Savant covered the story last week when the social media business decided to block all media content in the country. In January, the search engine company even threatened to remove the search engine completely from the country.

Fortunately, since then, each tech business has come to an agreement with the Australian government and publishers. Facebook restored content, and Google has made several commercial agreements with Australian publishers. That said, Facebook still strongly opposes the law. The Vice President of Global Affairs at the social media company, Nick Clegg, wrote a blog post detailing the business opposition to the law.

In addition, the Australian government said the law will be reviewed by the Treasury after one year to “ensure it is delivering outcomes that are consistent with the Government's policy intent.”

Facebook and Google — a Look Into the Future

This move by the Australian government could set a precedent for other countries. The news of Australia’s action comes a little over a month after CNBC reported Google has agreed to pay French publishers for news content. CNN has also reported Canada, the European Union, and the US are considering similar measures to Australia.

About the Author

Headshot of McKenzie Carpenter

McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.

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