Pay up: Government wants binding code forcing Facebook and Google to pay for news content

COVID-19 ad revenue crisis prompts government to demand binding code that will compel digital giants to pay for news content hosted on their platforms

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Digital platforms like Facebook and Google will be required to pay news outlets for hosting their content as part of a mandatory code of conduct the Australian government is planning to introduce.

The Federal Government has now said it is directing the Australian Competition and Consumer Commission (ACCC) to develop the mandatory code to address “imbalances” in bargaining power between these digital behemoths and media companies.

The mandatory conduct scheme replaces the Government's initial plans for the consumer watchdog to work with the digital platforms to develop a voluntary code following its response to the final report from the ACCC’s Digital Platforms Inquiry. At the time, the Government had indicated if an agreement was not forthcoming, it would develop alternative options to address concerns raised, including a mandatory code.

However, the timeframe has now been sped up in the wake of falling ad revenues and media outlets struggling due to the COVID-19 economic shutdown. It's a situation that has seen many news media outlets stand down staff, close print and magazine titles and introduce reduced pay for employees. 

In a statement released today jointly by the ACCC and Communications Minister, Paul Fletcher, the pair said limited progress on a voluntary code, together with heightened financial pressure on media organisations in the current climate, has forced it to move on a binding mechanism.

News outlets have reacted positively to today's announcement, with News Corp Australasia executive chairman, Michael Miller, saying Google and Facebook have built trillion dollar businesses by using other people's content and refusing to pay for it.

“Their massive failure to recognise and remunerate creators and copyright owners has put at risk the original reporting that keeps communities informed,” he said.

Miller said the Australia media industry is at a tipping point and a mandatory code is urgently needed and noted the rush of audiences back to trusted news sources during the COVID 19 crisis.

“It is a powerful reminder that real journalism must not be destroyed by companies that take it for their own use and refuse to pay,” he said.

Nine CEO, Hugh Marks, also congratulated the Government for taking swift and decisive action on this important issue. 

“Now more than ever, it’s important the global technology companies take some responsibility for contributing to our society through financially supporting the creation of quality Australian content," he said.

The ACCC’s Digital Platforms Inquiry was tasked with examining competition in the digital arena, the dominance of digital platforms like Facebook and ensuring a sustainable Australian media landscape in the digital age.

The Government said the draft mandatory code will be released for consultation by the ACCC before the end of July, with a final code to be settled soon thereafter.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.


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