Digital platforms such as Facebook and Google will be forced to pay Australian media companies for news content after the country’s treasurer, Josh Frydenberg, instructed the competition regulator to develop a mandatory code of conduct to address commercial arrangements between digital platforms and news media businesses. Frydenberg said this will “help create a level playing field and a fairer go for all”.

The code — to be developed by Australian Competition and Consumer Commission (ACCC) — will cover sharing of data, transparency of ranking algorithms and display of news content, and the monetisation and the sharing of revenue generated from news. The mandatory code will also establish appropriate enforcement, penalty, and binding dispute resolution mechanisms. The code will also define news content that will be covered, and will cover services such as Instagram and Twitter. A draft mandatory code will be released for consultation by the end of July.

“The Australian media sector was already under significant pressure that has now been exacerbated by a sharp decline in advertising revenue by coronavirus,” Frydenberg’s statement said. “It is only fair that the search engines and social media giants pay for the original news content that they use to drive traffic to their sites,” Frydenberg said on April 17 in an announcement titled “We’ll Hold Digital Giants to Account”.

An ACCC report had found that 98% of online searches on mobile devices are with Google, while Facebook has approximately 17 million users who are connected to its platform for at least half an hour a day, Frydenberg wrote in a column for The Australian yesterday. In its final report, the ACCC had identified that Facebook and Google have each become unavoidable trading partners for Australian news media businesses in reaching audiences online, resulting in an imbalance in bargaining power.

A voluntary code was due to be finalised in November 2020 but after limited success in negotiations between platforms and the news industry, and finally the decline in ad revenue due to the COVID-19 crisis, the government has now asked the ACCC to write a mandatory code. There was no “meaningful progress” on the fundamental issue of payment for content, the ACCC had said that there was “no expectation of any even being made”, Frydenberg wrote in the column.

French competition authority has ordered Google to pay news websites for snippets

Earlier this month, the French competition authority, the Authorité de la Concurrence, ruled that Google would have to negotiate with news publishers to remunerate them for article snippets the search giant shows in search results. The ruling was based on a suit filed by French publishers after the country’s implementation of the EU’s Copyright Directive, which specifically targeted aggregators like Google for profiting from news companies without remunerating them.

In 2014, Spain had passed a law similar to the EU-wide directive that led to Google no longer offering Google News in that country.