Explainer: Google, Facebook battle Australia over proposed revenue-sharing law


Smartphone with google app icon is seen in front of the displayed Australian flag in this illustration taken, January 22, 2021. REUTERS/Dado Ruvic/Illustration

SYDNEY (Reuters) - Alphabet Inc's Google has vowed to withdraw its main search engine from Australia, while Facebook Inc says it will block news sharing if the government proceeds with a law to make them pay domestic media outlets for content they feature.

The dispute is being closely watched worldwide since it would be the biggest challenge yet to how the U.S. tech companies that dominate social media and search engines use news on their websites.

WHAT DOES THE LEGISLATION SAY?

* The planned law states that Australian news outlets can negotiate individually or collectively with Facebook and Google over payment for content used on the tech firms' sites. Other tech firms may be added if they are deemed big enough.

* If the parties cannot reach an agreement, an arbitrator will decide whose offer is more reasonable. If Facebook or Google break any resulting agreements, they can be fined up to A$10 million ($7.4 million) in civil penalties.

* The law also requires tech firms give media outlets notice when they change search algorithms in a way affecting the order in which content appears. They must also share their use of consumer data extracted from news content on their sites.

* The Australian Competition and Consumer Commission (ACCC) began investigating search engine and social media companies in 2017 and worked with the federal government on drafting the rules, which are the subject of a parliamentary inquiry but expected to be passed into law.

* While internet and media companies have battled in other jurisdictions, notably in Germany over the copyright rules for news snippets and other items published by Google, Australia's proposal represents the most expansive reform.

WHY WAS THE LAW PROPOSED?

* In recent years, traditional media companies operating in Australia have suffered huge hits to income streams, such as subscriptions and advertising. For every A$100 spent on online advertising in Australia, excluding classifieds, nearly one-third goes to Google and Facebook, the competition regulator has said.

* In 2019, the regulator published a report stating news outlets lacked bargaining power when negotiating with digital firms over compensation for content posted on online platforms. It said this was a problem because those same publishers relied on Facebook and Google to reach many of their consumers.

* The government wanted the tech giants to abide by a voluntary code. Citing lack of progress in discussions, it decided that legislation was necessary.

WHAT HAS THE RESPONSE BEEN?

* The local arm of News Corp is a vocal supporter of the legislation. It partly blamed the tech companies for the closure of dozens of mastheads in 2020.

* Google and Facebook say they help connect media outlets with consumers, boosting their subscriptions and enabling them to charge advertisers more.

* Facebook says it has sent billions of clicks a year to Australian news websites via articles appearing on users' pages, and has threatened to remove news links from Australian users' feeds.

* Google says it is prepared to pay for content, though no major media organisation has agreed to its terms. Google has said it will withdraw its main search engine from Australia if the laws go ahead.

* Australia is planning more regulation of large technology companies in the media industry. The ACCC has suggested new data-sharing rules which would challenge the dominance of Google and Facebook in the online advertising market, and will publish a report in March on the role of Google and Apple Inc in the smartphone software industry.

* Australia has previously engaged in lengthy battles with major corporations. In 2012, the then centre-left government became the first in the world to prohibit cigarette companies from using designs on their packaging to attract consumers. Tobacco companies mounted legal challenges but the courts ultimately upheld the law.

($1 = 1.3501 Australian dollars)

(Reporting by Jonathan Barrett and Byron Kaye; Editing by Christopher Cushing and Christian Schmollinger)

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3

   

Did you find this article insightful?

Yes
No

100% readers found this article insightful

Next In Tech News

‘Spooky’ AI tool brings dead relatives’ photos to life
‘Grand Theft Auto’ blamed for recent surge in carjackings in Chicago; gaming experts object
Driverless bus hits streets of Malaga in southern Spain
How tweet deleting increased in 2020
This website will tell you the time in the most memorable of ways
Do the locomotion: Trainspotting hobbyists gather steam online Premium
New Indian social media rules could threaten free expression, critics warn
Bitcoin extends retreat from record high to hit lowest in 20 days
New Zealand to use AI-enabled drones to track endangered dolphins
Judge in Google case disturbed that even ‘incognito’ users are tracked

Stories You'll Enjoy


Vouchers