Tech giants 'close' to deals with Australian media

Australia is poised to adopt legislation that would force digital companies to pay for news content.
Australia is poised to adopt legislation that would force digital companies to pay for news content.PHOTO: AFP

SYDNEY (AFP) - Google and Facebook are "very close" to deals with major Australian media to pay for news, a top government official said on Monday (Feb 15), as the tech giants scrambled to avoid landmark regulation.

Australian Treasurer Josh Frydenberg said talks with Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai had made "great progress" in resolving a standoff being closely watched around the world.

Australia is poised to adopt legislation that would force digital companies to pay for news content, something that would create a global precedent and, according to Facebook and Google, wreck the way the Internet works.

The companies have threatened to partially withdraw services from the country if the rules become law, sparking a war of words with the government in Canberra.

But that disagreement appeared to ease on Monday, with Mr Frydenberg telling public broadcaster ABC talks with the companies "made great progress over the course of the weekend".

"I think we're very close to some very significant commercial deals," he said, "and in doing so, that will transform the domestic media landscape."

The agreements could be enough to see Facebook and Google avoid the most severe parts of the legislation, including binding arbitration to ensure they are not using their online advertising duopoly to dictate terms in deals with media companies.

Amid Mr Frydenberg's remarks, SevenWest Media, the owner of broadcaster 7NEWS and The West Australian newspaper, announced on Monday a new agreement for its content to be hosted on Google's News Showcase product.

The Sydney Morning Herald reported the first major deal with a large Australian news organisation was worth more than 30 million Australian dollars (S$30.88 million) a year.

SevenWest chairman Kerry Stokes said it was a "great outcome" and hailed the government's work on its news media bargaining code as "instrumental in the outcome of this ground-breaking agreement".

The firm will join several smaller local publishers on News Showcase, which Google said had received more than one million views since launching in Australian eight days ago.

Mr Frydenberg's comments suggest major Australian media organisations, such as Mr Rupert Murdoch's News Corp and Nine Entertainment, could be close to reaching similar deals.

News groups worldwide have seen their businesses ravaged by the loss of advertising dollars that once flowed to their newspapers but are now overwhelmingly captured by the big digital platforms.

Thousands of journalists' jobs have been lost and numerous outlets forced to close in Australia alone over the past decade.