How did it all start?
On July 31, the first information appeared in the media that Facebook and Google would be forced to pay
Australian Competition Commission andConsumer Protection Commission (ACCC) has ordered the development of a mandatory code of conduct to regulate commercial transactions between tech giants and news media companies.
It was reported that the draft code will be issued by the ACCC and will be open for consultation until the end of August, and the law is expected to be introduced to parliament "shortly after" the end of the consultations.
Federal Treasurer Josh Friedenberg said the code would "create a level playing field" between the two.
"We want Google and Facebookcontinued to provide the Australian community with these services that Australians love and use. But we want it to be on our terms. We want it to be consistent with our law, and we want it to be fair.
Josh Frydenberg, Federal Treasurer
According to the law, it will be the treasurer who will decide onwhat digital platforms the code is distributed, and Friedenberg said he would "start with Google and Facebook." He also noted that the code will require certain platforms to “negotiate in good faith” payment agreements with Australian news companies.
In turn, Minister of Communications Paul Fletcher said that the draft code does not define what content is worth or what agreement should be concluded.
“The code suggests that it could be one of several possibilities, it could be a fixed annual amount, or it could be a payment for an item of content,” he stressed.
ACCC Chairman Rod Sims said the code wasis designed to be revised after a year, which means that if the process doesn't work, it may change based on feedback. He said he expects the decision to set a precedent worldwide.
“I don't want to get ahead of ourselves, but as we learned from overseas, I hope they can learn something from us,” Sims said.
Fines and nuances of the new law
The authorities have stated that if an agreement cannot beachieved, it will be referred to the arbitral tribunal, where each party can put forward a proposal, and an independent arbitrator will decide which one to advance.
The Code will provide small businesses such asregional and rural newspapers, the ability to collectively bargain with digital platforms, and fines await those digital giants who do not participate in the negotiations.
There are a number of different penalties, one of which is 10% of a company's total Australian turnover. All in all, fines can amount to hundreds of millions of dollars.
“This is a very powerful threat,” Sims emphasized.
However, the authorities have not yet determined how much revenue Google and Facebook will pay large publishers for using their content.
The ACCC Chairman said the new measuresprovide three months of negotiations, followed by 45 days of arbitration, which will force the parties to agree on the amount of payment sooner rather than later. The authorities expect payments to be made within six months after the law is passed.
What media, as planned by the authorities, can receive payment?
The Australian Communications and Media Authority will assess which news outlets are eligible based on the criteria outlined in the draft code.
Particular attention will be paid to media outlets that are engaged in journalism "in matters of public interest", or those that report on local and social events and publish their materials on the Internet.
These businesses adhere to the appropriateprofessional editorial standards, maintain editorial independence from subject matter news coverage, and operate primarily in Australia to serve Australian audiences.
Federal Treasurer Josh Frydenberg
Google and Facebook first reaction
In a statement, Google Australia managing director Mel Silva called the new code "tough government interference."
“We hoped the code would be forward-looking andthis process will create incentives for both publishers and digital platforms to negotiate and innovate for a better future, ”she said.
We are deeply disappointed and worried thatthe draft code does not provide this. Instead, harsh government intervention threatens to impede Australia's digital economy and affects the services we can provide to Australians.
Melanie Silva, Managing Director, Google Australia
A Facebook post said the company is not confident the new law will not have a significant impact on the company's revenue if there is no news content available.
“News content is easily replaceable andmost users do not log into Facebook with the intention of viewing the news, ”the message says. "But the lack of news on Facebook would mean publishers will miss out on the commercial benefits of reaching a wide and diverse audience."
The company said it "would strongly prefer news publishers' content to be available" on its platform.
In response to the announcement of the mandatory code, News Corp executive chairman Michael Miller said it could help secure the future of Australian media companies.
"Days of free use of someone else's content ontechnology platforms are running out. They benefit immensely from the use of news content created by others, and it is time for them to stop denying this fundamental truth, ”he said.
What's going on now?
Facebook has issued a threat in response to a proposed law that would force Facebook and Google to pay Australian media organizations to host their content.
“Assuming that this draft code will becomeby law, we will be reluctant to stop allowing publishers and people in Australia to post local and international news on Facebook and Instagram, ”Will Easton, Managing Director of Facebook Australia and New Zealand, said in a statement.
“This is not our first choice - this is our lastdecision. But it is the only way to defend against the consequences that defy logic and hurt, rather than help, the long-term dynamics of the Australian news and media sector. ”
Easton took aim at the Australian Commission oncompetition and consumer protection (ACCC), which drafted a code, accusing it of ignoring the role of social media in advancing journalism. He claimed that in the first five months of 2020, users clicked on the Australian news posted on the platform 2.3 billion times, which the company said generated $ 200 million in revenue for Australian media organizations.
“In developing this new law, the commissionobservers of the process ignored important facts, most notably the relationship between news media and social networks and which of them benefit most from the other, Facebook believes.
News represents only a portion of what people see in their news feed and is not a significant source of revenue for us.
Will Easton, Managing Director of Facebook Australia and New Zealand
While Facebook is still working on how"Deny news". Facebook has also updated its terms of service, which will take effect next month. According to the changes, Facebook will retain the right to block information that may have “regulatory impacts” on it.
“We can also remove or restrict access toyour content, services or information if we determine that it is reasonably necessary to avoid or mitigate adverse legal or regulatory impact on Facebook, ”the statement reads.
How did the Australian authorities react to Facebook's statement?
In response, Treasurer Josh Friedenberg accused Facebook of "tough threats" in an attempt to get its way.
We are committed to these reforms. We will not be bullied, no matter how big the international company is, no matter how powerful they are, no matter how valuable they are.
Josh Frydenberg
Statements Frydenberg was supported by his cabinet colleague, Communications Minister Paul Fletcher, who said the views of all parties would be taken into account when developing the code.
Communications Secretary Paul Fletcher says Facebookcame up with "tough" threats. In a statement, ACCC Chairman Rod Sims called Facebook's intervention "wrong", arguing that many Australians rely on Facebook to make news content accessible.
"Today's threat to Facebook preventeddissemination of news about its services in Australia is untimely and erroneous,” — he said. “The draft media bargaining code aims to ensure Australian news businesses, including independent, local and regional media, can have a seat at the table for fair negotiations with Facebook and Google. "We note that according to the University of Canberra's 2020 Digital News Report, 39 per cent of Australians use Facebook for general news and 49 per cent use Facebook for COVID-19 news."
Local media reaction to the threat Facebook
A spokeswoman for the Australian newspaper Nine Newspapers said Facebook's response was "weird."
“This is a demonstration of what Facebook is usingtheir monopoly power, but they do not understand the importance of reliable news content to counterbalance the fake news that circulates on their platform, ”she said. “We are ready to collaborate and look forward to achieving meaningful results with Facebook, which will work for both of us and, importantly, the Australian community.”
The media have long argued that companies like Facebook and Google benefit from the work of journalists without paying to access those stories or sharing ad revenue from their platforms.
How did Google react to the new law?
Google has previously launched a vigorous campaign against the law by sending an open letter to its users.
Google has warned Australians they shouldexpect "significantly worse" services if the federal government goes ahead with its plans to pay for Australian news. In the letter, Google says its free services in Australia, such as its search engine and YouTube, could be at risk.
In a letter, Mel Silva, managing director of Google Australia and New Zealand, said the code would seriously affect Google and its subsidiary YouTube.
"Proposed Law, Bargaining Codewith the media, will force us to provide you with a significantly worse search experience on Google and YouTube, could result in your data being shared with major news companies, and will jeopardize the free services you use in Australia,” the letter said. In fact, Google and YouTube have warned Australian users that they may lose content supplied by these platforms.
The law will compel us to provide the unfairan advantage for one group of businesses - the media companies - over everyone else with a website, YouTube channel, or small business. The proposed changes are dishonest and mean that Google and YouTube search results will be worse for you.
Google Australia and New Zealand Managing Director Mel Silva
A similar letter to the Australian creators of YouTube was sent by the head of YouTube Asia Pacific, Gautam Anand.
The letter was shown to some users on the Google homepage on August 17. On YouTube, there will be similar promotions started the next day.
What's the bottom line?
The government says its proposed laws are necessary to create a level playing field for local media and large Internet companies.
Google also reacted furiously to thisproposal. Under the laws, Facebook and Google will be forced to negotiate with Australian media companies over payments for their content. If agreement cannot be reached, they can be forced to agree.
The Code also requires Google and Facebookare advised in advance of any changes in their algorithms that may affect the display of news content. It would also set the standard for how Google and Facebook share data about how users access news content.
The ACCC strongly condemned Google's claims that itwill have to start charging for their services, arguing that this will only be a result of the company's own choice. The commission also denied speculation that tech companies would be forced to transfer user data to media companies.
Labor spokeswoman Michelle Rowland said the government needed to come up with a "workable" proposal when drafting the bill.
“Australian news media need a working codeto maintain the sustainability of public interest journalism, ”she said. “The government is obliged to develop a workable code. The range of issues of concern to all stakeholders requires a credible response from the government. ”
Public consultations on the code ended Friday, and the government is now reviewing the feedback.
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