Australia to make Google, Facebook share ad revenue

SYDNEY • Australia will force Facebook and Alphabet Inc's Google to share advertising revenue with local media firms, the treasurer has said, becoming one of the first countries to require digital platforms to pay for content they use.

Treasurer Josh Frydenberg said yesterday that the move comes after talks with Facebook and Alphabet failed to yield a voluntary code to address complaints by domestic media players that the tech giants have too tight a grip on advertising, their main source of income.

"We understand the challenge that we face, this is a big mountain to climb," Mr Frydenberg told reporters in Canberra.

"These are big companies that we are dealing with, but there is also so much at stake, so we're prepared for this fight," he said.

The drive for the new rules has been led by powerful media mogul Rupert Murdoch, who has accused Facebook and Google of having "popularised scurrilous news sources" over reputable outlets.

The government has now asked the competition watchdog, the Australian Competition and Consumer Commission (ACCC), to frame a mandatory code of conduct between media outlets and digital platforms after talks stalled on content payment rules.

The government scrapped its initial plan to come up with a voluntary code by November and has asked the ACCC to submit its draft mandatory code by July, to be passed into legislation shortly thereafter, the treasurer said.

Mr Frydenberg also said the mandatory code will include sharing of data, ranking and display of news content and the sharing of revenue generated from news, adding that it would also establish penalty and binding dispute resolution mechanisms.

Australia's online advertising market is worth almost A$9 billion (S$8.2 billion) a year and has grown more than eightfold since 2005. For every A$100 spent on online advertising in Australia, excluding classifieds, nearly a third goes to Google and Facebook, an ACCC report on digital platforms published in June last year showed.

Mr Frydenberg also said it was only fair that media companies that created the content got paid for it. "This will help to create a level playing field."

Last December, Australia said Google and Facebook would have to agree to new rules to ensure they do not abuse their market power and damage competition, or they would face new controls.

Annual value of Australia's online advertising market, which has grown more than eightfold since 2005.

Facebook expressed dismay at the government's move yesterday, saying: "We're disappointed by the government's announcement, especially as we've worked hard to meet their agreed deadline."

Facebook Australia and New Zealand managing director Will Easton added in an e-mailed statement: "We've invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry."

Google said it would continue to cooperate with plans for the media code of conduct.

"We have sought to work constructively with the industry, the ACCC and government to develop a code of conduct, and we will continue to do so in the revised process set out by the government," a Google spokesman said.

If Australia is successful in its efforts to ensure more advertising revenue flows to publishers, it would be the first country to do so.

France last year became the first European Union nation to implement the bloc's copyright directive that requires payment for reproduced news content, but Google has so far refused to pay and instead said it would no longer display French reports.

Yesterday's move came amid the coronavirus pandemic, which has hit Australia's media business hard, with regional outlets reporting steep falls in ad revenue. The government last week unveiled a support package for local media firms, including a A$50 million public interest news gathering programme.

REUTERS, AGENCE FRANCE-PRESSE