Australian government takes on tech giants over ‘world-first’ legislation, enforcing media dues

In December, the government of Australia initiated proceedings that would make it a legal requirement for tech giants like Facebook, Google and Microsoft to strike payment deals with individual news organisations – or else they would be prohibited from including their journalism within search and newsfeed functions. The Australian government described this legislation as a ‘world-first’ measure that would ensure journalists were recompensed fairly for the use of their content or else tech companies would be liable to pay a hefty fine.

The Australian government hopes that this new code would also account for traditional newspapers’ and broadcast networks’ loss of advertising revenue to big tech in an increasingly digital world. In Australia, newspaper revenues have fallen from just over $5 billion in 2005 to $3 billion by 2018. Alternatively, Google made $3.7 billion in total revenue in Australia in 2019, of which $7.7 million derived directly from news content.

In May 2020, News Corp Australia, owned by Rupert Murdoch, announced that 125 of its Australian newspapers would go online-only or close entirely, citing the general migration of advertising from print to digital and the economic shock of the Coronavirus pandemic forcing the suspension of physical printing for certain papers.

However, the Australian government have faced strong opposition from the affected tech giants. Mel Silva, managing director of Google Australia, argued in a Senate hearing that payments to news organisations in exchange for search results would create ‘financial and operational risks’ making it difficult for the company to continue to offer its search feature within the country. Silva’s counterpart at Facebook, Will Easton, stated in a blog post that the draft legislation ‘defies logic’ and would hurt the ‘long-term vibrancy of Australia’s news and media sector.’

As a result, both have taken a hard line and threatened to withdraw key features of their mainline services within Australia, arguing that the new legislation makes their continued operation untenable. Facebook suggested that, if the bill became law, it may block Australians from sharing news on the platform, whereas Google threatened to remove its search engine entirely from the Australian market.

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Pictured: A pop-up ad published on the Google homepage in Australia last year, intended to lobby Aussies against the new regulation. Picture credit: The Guardian/ Google

In response, Australian Treasurer Josh Frydenberg stated that ‘coercion or heavy-handed threats’ made by major tech companies would not deter the government’s actions. However, other countries have previously had difficulties implementing guidelines similar to those proposed in Australia. Google withdrew its dedicated news service in Spain when its government mandated the company paid similar dues to media publishers. In addition, French authorities only recently resolved a dispute with Google over implementation of EU copyright law with regards to the use of news excerpts within embedded links. This demonstrates that big tech firms are serious in their threats to withdraw services from the Australian market, suggesting that its government may well be taking a considerable risk.

However, not all tech giants oppose the new law. In a recent press release, Microsoft pledged their support for the new legislation, announcing that it would closely follow the provisions with Bing, its own search engine. President of Microsoft Brad Smith argued that the new code would establish a more level playing field between big tech and media groups and encouraged other countries, specifically the United States, to consider introducing a similar directive. Whilst the support of the one of the world’s highest-valued companies is a clear boost to the Australian law, Bing accounts for fewer than 1 in 20 searches within the country, meaning the practical impact of Microsoft’s backing is limited.

This legislation has high levels of support within the Australian journalism industry, with its major national media organisations such as News Corp Australia and Nine Entertainment along with public broadcasters ABC and SBS unanimously backing the draft legislation. Furthermore, data indicates the majority of Australians support the government’s actions. A poll conducted by the Guardian found that 59% of Australians agree that Facebook and Google have too much power, and that 57% believed the two should have to pay news organisations for distributing their content.

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Pictured: A selection of newspapers on sale at a shop in Sydney. Picture credit: Reuters

Movements to force tech giants to pay journalists fairly for the use of their content are not confined to Australia. During proceedings for new legislation, Australian Senator Rex Patrick warned Google that the new measure is ‘going to go worldwide,’ questioning whether the threat to withdraw their search engine would be viable if they ended up pulling out of ‘every market.’ Members of the European Parliament drafting the Digital Services Act and the Digital Markets Act, which are essentially designed to impose stricter regulations on tech giants, have signalled they may introduce amendments similar to the new Australian code. 

In addition, Facebook announced in December that they would begin paying British news publishers for their content being included in the Facebook News feature, launched in the UK last month. Hundreds of media outlets signed up, including the Guardian, the Economist and Sky News. As a result, the Australian government may very well be setting an international precedent forcing major tech firms to pay smaller news organisations fairly for their work.

Header image credit: BBC News