Australia to reveal legislation that would force Google and Facebook to pay for news content

Australia's government will reveal legislation in Parliament on Wednesday that would make Facebook and Google pay for journalism.

The law, if passed, would go further than any other in the world

Australia is about to reveal legislation that would require Google and Facebook to pay for journalism. (Denis Charlet/AFP/Getty Images)

Australia's government will reveal legislation in Parliament on Wednesday that would make Facebook and Google pay for journalism.

Treasurer Josh Frydenberg said Tuesday that the legislation to create the News Media Bargaining Code will be scrutinized by a parliamentary committee following its introduction and before lawmakers vote on it next year.

"This is a huge reform," Frydenberg told reporters. "This is a world first. And the world is watching what happens here in Australia."

He added, "This is comprehensive legislation that has gone further than any comparable jurisdiction in the world."

The legislation differs from draft proposals that were released in July after consultations with the social media platforms, as well as Australian media organizations.

Australian Treasurer Josh Frydenberg in Canberra on Tuesday. Frydenberg calls the legislation 'a world first.' (Lukas Coch/AAP Image via The Associated Press)

Canada has also promised action

In its most recent throne speech, the Canadian government promised to seek compensation from tech giants for news content.

"Web giants are taking Canadians' money while imposing their own priorities," the Liberal government said, vowing there would be change. 

The Australian government had initially planned to exclude state-owned media — the Australian Broadcasting Corporation and the Special Broadcasting Service — from being compensated by the tech giants for their journalism.

Frydenberg said those broadcasters would be paid under the latest draft legislation like commercial media businesses.

Facebook has warned it might block Australian news content rather than pay for it.

Google has said the proposed laws would result in "dramatically worse Google Search and YouTube" and put free services at risk, and it could lead to users' data "being handed over to big news businesses."

'A significant step forward'

Frydenberg said Google was taking 53 per cent of online advertising dollars while Facebook took a 23 per cent share.

Michael Miller, executive chairman of News Corp Australia, one of the nation's largest media organizations, described the draft legislation as a "significant step forward in the decade-long campaign to achieve fairness in the relationship between Australian news media companies and the global tech giants."

"All we have ever sought is a fair commercial outcome and fair payment for the valuable news content our journalists create," Miller said in a statement. "I believe this code puts in place the framework for this to be achieved."

Facebook Australia's managing director, Will Easton, said he would review the draft legislation once it became public on Wednesday.

"We'll continue to engage through the upcoming parliamentary process with the goal of landing on a workable framework to support Australia's news ecosystem," Easton said in a statement.

Google said in a statement that it would comment after it had seen the revised legislation on Wednesday.

Spain, France have tried and failed with similar measures

The conservative government might need the support of the centre-left opposition Labour Party to get the legislation through the Senate, where no party or coalition holds a majority of seats.

Senior Labour lawmaker Jim Chalmers said his party gave in-principle support for "efforts to ensure that the playing field is levelled between the tech platforms and the news media organizations."

But Chalmers said the government had yet to brief Labour on the legislation's details.

The legislation would create an arbitrator to address the bargaining imbalance between the tech giants and news businesses. If a platform and a news outlet can't reach an agreement on price, an arbitrator would be appointed to make a binding decision.

Spain and France have both failed to make Facebook and Google pay for news through copyright law.