The Australian government has released its plan to force Google and Facebook to pay news outlets for the content they publish. A proposal from the Australian Competition and Consumer Commission (ACCC) says media companies should be allowed to negotiate payments for their content, which is currently shared on most platforms for free.
In 2019, the ACCC was tasked with working with Google and Facebook and news media businesses to develop and implement voluntary codes of conduct. In April, the ACCC released a preliminary report stating it was unlikely that payment for content would be agreed upon through this voluntary process. So, the ACCC was tasked with creating a mandatory code of conduct.
The "draft code," released on Friday, states news companies can negotiate payments for the content that appears in tech giants' news feeds and search results. It would apply only to Google and Facebook at first, but other digital platforms may be added.
According to BBC News, Australian Treasurer Josh Frydenberg said the "world-leading" code of conduct aims to give publishers "a level playing field to ensure a fair go." The draft would be debated by parliament, he said, according to BBC News.
If Facebook and Google fail to comply, "substantial penalties" of hundreds of millions of dollars could be imposed on the tech companies, Frydenberg said.
The ACCC draft states media businesses that produce content of public significance for Australians would be allowed to negotiate payments with the tech giants. Eligible businesses must "adhere to minimum levels of professional editorial standards, and maintain a suitable degree of editorial independence." They must also operate in Australia and generate revenue of more than AU$150,000 a year.
The digital age has forced many traditional news sources like newspapers to shut down, and many others have had to rework their business models.
In a statement to CBS News on Friday, Facebook said: "We are reviewing the Government's proposal to understand the impact it will have on the industry, our services and our investment in the news ecosystem in Australia."
CBS News has also reached out Google for comment on the ACCC's newly-released code of conduct draft.
In a statement released in June, Facebook said its platform already provides "significant support" to "the Australian news ecosystem" with free distribution of content.
The company also said its News Feed generated "approximately 2.3 billion organic referrals to Australian news publisher domains from January through May 2020." This traffic is estimated to be worth AU$195.8 million to Australian publishers, according to the statement.
"In addition to this, we continue to ramp up our direct financial contributions to the news industry – not to make a profit – rather because we believe news is a public good and it plays an important social function," the statement continues. The statement says Facebook receives very little direct commercial value from news content.
In another statement from June, Mia Garlick, Director of Public Policy, Australia and New Zealand, said Facebook does believe that a code between news publishers and digital platforms is achievable. However, it should not introduce "excessive penalties on tech companies."
Google also responded the ACCC's preliminary report in May, with a statement from Managing Director and VP of Google Australia Mel Silva. The statement said Google at first "welcomed" the ACCC's negotiations for a code of conduct.
"The Government has now announced it will move to a mandatory code and has accelerated the original timeline," the statement continues. "In light of this, we want to respond to some misconceptions and explain how we work with a wide range of publishers, large and small."
The tech giant said Google Search does not make money when a user clicks a news result – but they do when a user clicks an ad. "News.google.com has no ads, nor does the news results tab on the search page," the statement continues. The company also says it drives traffic to news sites more than 24 billion times a month globally and that publishers can decide whether their content shows up in Google Search.
According to a 2018 study by the News Media Alliance, a trade association representing approximately 2,000 newspapers in the U.S. and Canada, Google made $4.7 billion from the work of news publishers in 2018 via search and Google News.
The study, conducted by Keystone Strategy and written by the News Media Alliance, says it is difficult to quantify how Google makes money off of news publishers, but one way is by using news content for product development, such as training its artificial intelligence services.
"The findings clearly point to Google responding to an increase in consumers searching for news, creating and tailoring products that keep users within its ecosystem. This means more money goes back to Google and not the publishers producing the content," News Media Alliance President & CEO David Chavern said in a press release about the study.
Chavern has called for legislation in the U.S. to help news publishers "collectively negotiate for better terms with platforms such as Google and Facebook."
In 2019, a bill that would accomplish this, the Journalism Competition & Preservation Act, was introduced in the House by Rep. David Cicilline (D-RI) and Rep. Doug Collins (R-GA), as well as in the Senate by Sen. John Kennedy (R-LA) and Sen. Amy Klobuchar (D-MN).