All you need to know about tussle between Google, Facebook and Australian govt
For two decades, global news outlets have complained internet companies are getting rich at their expense, selling advertising linked to their reports without sharing revenue. Now, Australia is joining France and other governments in pushing Google, Facebook and other internet giants to pay. That might channel more money to a news industry that is cutting coverage as revenue shrinks. Let’s read more about the issue…
What’s happening in Australia
Facing a proposed law to compel internet companies to pay news organisations, Google has announced deals with Rupert Murdoch’s News Corp. and Seven West Media. No financial details were released. The Australian Broadcasting Corp. is in negotiations.
Google accounts for 53 per cent percent of Australian online advertising revenue and Facebook 23 per cent, according to Treasurer Josh Frydenberg. Google had threatened to make its search engine unavailable in Australia in response to the legislation, which would create a panel to make pricing decisions on news.
Facebook responded by blocking users from accessing and sharing Australian news. Facebook said the proposed law “ignores the realities” of its relationship with publishers that use its service to “share news content.” That was despite Frydenberg saying this week Google and Facebook “do want to enter into these commercial arrangements.”
Why does this matter
Developments in Australia and Europe suggest the financial balance between multibillion-dollar internet companies and news organizations might be shifting. Australia is responding to complaints internet companies should share advertising and other revenue connected to news reports, magazine articles and other content that appears on their websites or is shared by users.
The government acted after its competition regulator tried and failed to negotiate a voluntary payment plan with Google.
The proposed law would create a panel to make binding decisions on the price of news reports to help give individual publishers more negotiating leverage with global internet companies.
What does this mean for the public?
Google’s agreement means a new revenue stream for news outfits, but whether that translates into more coverage for readers, viewers and listeners is unclear. The union for Australian journalists is calling on media companies to make sure online revenue goes into news gathering.
What does this mean for rest of the world?
Facebook and Google rightly fear the action in Australia could trigger similar laws across the world. Google, for instance, is already inking deals with publishers in countries like France. This might also expedite Facebook’s plans to rollout Facebook News in other geographies, and thus make the inflow of news into its platforms more contractual.
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