Australia: New law for Google and Facebook

The Australian parliament on Thursday passed a news media and digital platforms mandatory bargaining code that will make it compulsory for Alphabet Inc's Google and Facebook Inc to pay media companies for content.

The code will be reviewed within one year of its commencement, Treasurer Josh Frydenberg and Communications Minister Paul Fletcher said in a joint statement.

"The code will ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public-interest journalism in Australia," they said.

In return for the changes, Facebook agreed to lift a ban on Australians accessing and sharing news.

Rod Sims, the competition regulator who drafted the code, said he was happy that the amended legislation would address the market imbalance between Australian news publishers and the two gateways to the internet.

“All signs are good,” Sims told Australian Broadcasting Corp.

“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,” the Australian Competition and Consumer Commission chair added.

Google has already struck deals with major Australian news businesses in recent weeks including News Corp and Seven West Media.

Frydenberg said he was pleased to see progress by Google and more recently Facebook in reaching commercial deals with Australian news businesses.

But Country Press Australia, which represents 161 regional newspapers across the country, has raised concerns that tiny publications outside large cities might miss out.

Frydenberg and Facebook confirmed that the two sides agreed to amendments to the proposed legislation. The changes would give digital platforms one month's notice before they are formally designated under the code. That would give those involved more time to broker agreements before they are forced to enter binding arbitration arrangements.

A statement Tuesday by Campbell Brown, Facebook's vice president for news partnerships, added that the deal allows the company to choose which publishers it will support, including small and local ones.

Frydenberg said his department will review the code within a year to ensure it is delivering outcomes that are consistent with the government’s policy intent.