The Australian government just passed a new law that will require Google and Facebook to negotiate with news outlets to pay for their content or face arbitration. Both companies are opposed and will do their best to resist the regulation.
“This is a significant milestone. This legislation will help level the playing field & see Australian news media businesses paid for generating original content,” Josh Frydenberg, the Liberal party’s deputy leader said. Frydenberg and his party were instrumental in spearheading the new law.
According to the Australian Competition and Consumer Commission (ACCC), the law will address “a significant bargaining power imbalance between Australian news media businesses and Google and Facebook”.
Facebook especially had opposed the regulation from the start. The social media giant temporarily blocked users and publishers from sharing news content on its social network and only allowing them again after the Australian government agreed to make a series of amendments to the proposed law.
Google had also indicated that it would pull its search engine from Australia but later changed its decision. The company instead, chose to make agreements with media organizations to pay them for news content. The agreements include a major three-year agreement with News Corp. That deal will see Google make “significant payments” to host content from publishers like The Wall Street Journal and The New York Post in its News Showcase product.
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The law requires that Facebook and Google negotiate a fee to link to or use news content. It also includes a mandatory arbitration process if an agreement on fees can’t be reached. Both Google and Facebook companies had hoped to avoid the arbitration process. In the process, an independent body wpild decide the value of news content in news feeds and search results.
Google had argued in a blog post that the specific form of arbitration being proposed (binding final-offer arbitration) is unpredictable, and is biased against Google because the arbitrator “isn’t required to consider the value Google provides to news media businesses in the form of traffic to their websites.” The arbitrator also considers news outlets’ production costs, but not Google’s, it says.
The law also requires tech companies to give advance notice to news organizations about upcoming algorithm changes.
The law has also received support from Microsoft. It’s Bing search engine, which has less than 5 percent of the search engine market in Australia has publicly backed the law. Bing says it “reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses”. It says that it would be willing to abide by the rules “if the government designates us”. Bing is also in support of regulators introducing similar laws in the EU and US.
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