The Australian government aims to force Google and Facebook to share advertising revenue with newspaper publishers in Australia, according to the country’s top financial authority, Treasurer Josh Frydenberg. The details of an ad sales sharing plan still need to be worked out, but if it’s successfully implemented, it would be the first time in the world that online tech giants would be required to pay publishers directly. Google opted to pull its Google News product out of Spain after that country demanded something similar.
Australian Treasurer Frydenberg has instructed the country’s top consumer watchdog, the Australian Competition and Consumer Commission (ACCC), to figure out how the payments from tech giants to the newspapers would work, which is expected to be finalized by July, according to the Guardian.
The ACCC could require Google and Facebook to share sensitive data about its users and might force the companies to share a percentage of revenue with publishers. The two companies make about $4 billion per year in revenue from Australia, according to the Sydney Morning Herald.
“We asked the ACCC to engage in discussion with the stakeholders to reach a voluntary code of conduct. That hasn’t made meaningful progress, so now we are taking the decisive decision to create a mandatory code seeking to be the first country in the world to ensure that these social media giants pay for content,” Frydenberg said in a video published to Twitter.
Tech giants like Google and Facebook don’t host the news content that they provide, but publishers have still seen some advertisers prefer to spend money on social media platforms like Facebook rather than on the news sites directly.
“We’re disappointed by the Government’s announcement, especially as we’ve worked hard to meet their agreed deadline. COVID-19 has impacted every business and industry across the country, including publishers, which is why we announced a new, global investment to support news organizations at a time when advertising revenue is declining,” Will Easton, managing director for Facebook Australia and New Zealand, told Gizmodo in an emailed statement on Monday morning.
“We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem. We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry and hope the code will protect the interests of millions of Australians and small businesses that use our services every day.”
Google also expressed frustration with Australia’s decision to move ahead with making big tech pay publishers.
“We’ve worked for many years to be a collaborative partner to the news industry, helping them grow their businesses through ads and subscription services and increase audiences by driving valuable traffic,” a Google spokesperson told Gizmodo on Monday morning via email.
“Since February, we have engaged with more than 25 Australian publishers to get their input on a voluntary code and worked to the timetable and process set out by the ACCC,” the spokesperson continued. “We have sought to work constructively with industry, the ACCC and Government to develop a Code of Conduct, and we will continue to do so in the revised process set out by the Government today.”
It’s no surprise that Australia would lead the charge against the tech giants, given the fact that it’s the birth country of Rupert Murdoch, the owner of News Corp, which owns Fox News in the U.S. Murdoch’s News Corp accounts for roughly 60 percent of Australian newspaper sales revenue and has been a dominant force in Australian media for decades. Murdoch has lobbied hard against the tech industry both in the U.S. and Australia, arguing for years that companies like Facebook should pay him for content.
The dispute over intellectual property rights comes at a particularly ironic time for the Australian government. The entire cabinet of Prime Minister Scott Morrison spent the weekend getting questioned on Australian TV over their illegal sharing of a new book by former Prime Minister and political rival Malcolm Turnbull titled, A Bigger Picture.
The book was allegedly distributed by senior government advisor Nico Louw who sent an electronic copy of the book to at least 59 top government officials. Turnbull and his publisher have reportedly sent a cease and desist to Louw, who could face legal action, according to the Guardian. Various government officials like agriculture minister David Littleproud and foreign minister Marise Payne said over the weekend that while they received the book illegally, they had deleted it. It’s not clear if Morrison received a copy.