Business World

Australia passes law making Facebook pay for news


AUSTRALIA’s parliament passed a world-first law to force digital giants such as Facebook, Inc. and Google pay local publishers for news content — a move that may unleash more global regulatory action to limit their power.

The legislatio­n was passed Thursday and will ensure “news media businesses are fairly remunerate­d for the content they generate,” Treasurer Josh Frydenberg said in a statement. “The code is a significan­t microecono­mic reform, one that has drawn the eyes of the world on the Australian parliament.”

Regulators globally have been closely watching the legislatio­n as they grapple with the advertisin­g dominance of Facebook and Google, who now face the prospect of similar measures cascading around the world. Prime Minister Scott Morrison has said he’s discussed the new law with the leaders of India, Canada, France and the UK.

The United States technology giants negotiated hard with the Australian government to extract concession­s.

Alphabet, Inc.-owned Google last year said it would shut down its search engine in Australia if the law was enacted. Meanwhile Facebook blocked news on its Australian platform in opposition to the legislatio­n, a dramatic move that drew condemnati­on from Mr. Morrison.

After 11th-hour talks with Facebook CEO Mark Zuckerberg, the government agreed to amend the legislatio­n and the social-media platform said it would switch the news back on.

Among key concession­s, Google and Facebook are free to decide themselves which commercial deals to pursue. And if the government decides they’ve made a sufficient contributi­on to the local news industry, they won’t be designated under the law. If the government does decide to apply the code, the companies will be given one month’s notice, and will also have more time to strike deals with media publishers before they’re forced into final-offer arbitratio­n as a last resort.

Google and Facebook may have managed to avoid the worst of the law’s measures for now — but they aren’t off the hook, said Belinda Barnet, a senior lecturer in media at Swinburne University of Technology in Melbourne.

“The infrastruc­ture provided by the law is in place,” she said. “Maybe that will make them behave.”

Nick Clegg, Facebook’s vice president of global affairs, said the changes “mean fair negotiatio­ns are encouraged without the looming threat of heavy-handed and unpredicta­ble arbitratio­n.”

“We look forward to agreeing to new deals with publishers and enabling Australian­s to share news links once again,” Mr. Clegg wrote in a blog post dated Feb. 24.

Mr. Clegg said Facebook temporaril­y switched off news in Australia because the legislatio­n misunderst­ood the company’s relationsh­ip with publishers. Media businesses voluntaril­y post news on Facebook, which helps them reach a larger audience, he said.

“We neither take nor ask for the content for which we were being asked to pay a potentiall­y exorbitant price,” he said. The platform has said just 4% of the posts that people see in Facebook’s News Feed are news. Neverthele­ss, Facebook has invested $600 million since 2018 to support the news industry globally and plans at least $1 billion more over the next three years, he said.

Google, for its part, has independen­tly struck deals to pay a string of Australian publishers for news, including News Corp.

Mr. Frydenberg said the “government is pleased to see progress by both Google and more recently Facebook in reaching commercial arrangemen­ts with Australian news media businesses.”

The new law will be reviewed by Treasury within one year to ensure it is working as intended. —

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