Australia to force US tech giant Facebook and Google to pay news publishers

For the first time in a landmark move to protect independent journalism Australia will force US tech giant Facebook Inc. and Alphabet Inc’s Google to pay Australian media publishers for news content. Thus, Australia will become first such country which will help its native media company to gain royalty under the royalty-style system. If everything goes well between the stakeholders it will become law later this year.

What is the new move?

A recent 2019 study carried on Australian market estimated about 3,000 journalism jobs have been lost in Australia in the past 10 years, as traditional media companies pay advertising revenue to Google and Facebook which paid nothing in return for news content. As per Josh Frydenberg Australian Treasurer for every 100 Australian Dollar spent on online ads in Australia, excluding matrimonial and local advertisements, nearly a third goes to Google and Facebook.

Other countries had tried and failed to make the tech giants pay the royalty fees.

Various news publishers in, France Germany and Spain have implemented national copyright laws that force Google to pay licensing fees when it publishes any part of their news articles.

To curb this, in 2019, Google stopped showing news from European publishers on search results to its French social engine users.

What would be its Impact?

The move could see Australia going on to become the first country to force Google and Facebook to pay for news content. The move comes after meetings between the online platforms, ACCC and media companies failed to result in an agreement. Before it goes for debate in the Parliament the draft will undergo a month-long consultation. However, If it is passed, it is expected to be reviewed in a year’s time.

Though there is no clarity on how much the development will impact Google and Facebook’s revenues. On Thursday Google parent company Alphabet reported its first revenue decline amidst the global pandemic in its second-quarter earnings report, while Facebook posted 11% surge in revenues. Both the tech giants have been under the regulatory spotlight lately, with their CEOs appearing alongside the CEOs of Amazon and Apple in a Congressional antitrust hearing on Wednesday.