Big tech giants Google and Facebook will soon be forced to pay Australian news media companies for publishing their content on their respective platforms.
The restriction would come as part of a mandatory 'code of conduct' that Josh Frydenberg, the Treasurer of Australia, has instructed the country's competition watchdog to develop by the end of July 2020.
Here's all about it.
Goal to tackle 'power imbalance' in digital media
In December, the Australian government had asked the Australian Competition and Consumer Commission to develop a code to tackle the 'power imbalance' between media organizations and digital platforms.
For this, it had directed the ACCC to work with both parties and let them negotiate rules around how outlets should be paid for their content, informed about algorithm changes tweaking their rankings, among other things.
However, the discussions didn't move fast enough
As the discussions to come to a voluntary arrangement had made limited progress over the past few months, the government of the country has asked ACCC to write and publish a mandatory code by July.
It will have the same elements of the voluntary code, defining what kind of news will be eligible for payment, but also include penalties and binding dispute resolution mechanisms.
Here's what Frydenberg said about the decision
"What we want to see is a level playing field. What we want to see here is a fair go for the companies and for the journalistic content that is prepared," Frydenberg told Australia's Channel 7.
Media outlets in Australia have been hit significantly
The fast-tracked code from the government comes as the Australian mainstream media continues to decline due to falling revenues.
Basically, the big tech companies have taken a major chunk of ad revenues, reducing the number of newspapers and online journalists in the country by over 20% since 2014.
Additionally, the budgetary cuts stemming from the COVID-19 pandemic has made the revenue situation even worse.
Facebook said it is disappointed by the move
After Australia's move, Facebook expressed its disappointment over the matter, saying it had been working towards a voluntary arrangement and had announced investments to support outlets with shrinking ad revenue.
Meanwhile, Google claimed that search results deliver the most value to end-consumers when they are curated by relevance rather than commercial arrangements between different organizations, be it media outlets or digital platforms.