Facebook has said it is “disappointed” in the Australian government’s attempt to extract millions of dollars from tech giants to pay for media content shared through search and social media.
But on Monday the treasurer, Josh Frydenberg, vowed the Australian government “won’t bow to … threats” from big tech companies not to show local content, describing the coming stoush with Google and Facebook as a “battle worth fighting”.
The Australian government has opted for a mandatory code of conduct to distribute revenue to media companies because the Australian Competition and Consumer Commission had concluded “no meaningful progress” had been made on payment for content in negotiations for a voluntary code.
The ACCC chair, Rod Sims, told ABC TV that, when the government asked for a view about a week ago, the competition regulator advised progress on value-sharing or paying for content “seemed unlikely”.
He cited “the experience overseas”, particularly Spain and France, which “passed various laws to get Google and Facebook to pay for content and [they] have basically said ‘the amount we’re willing to pay is zero’”.
Frydenberg and the ACCC chair, Rod Sims, explained the compulsory code, to be finalised by July, could see Facebook and Google pay for content either as a proportion of the revenue user attention earns for the tech companies, or a proportion of the cost of the content, such as news.
Fryenberg told reporters in Canberra it was “hard to be specific” about how much the code could raise, but given Australian content is “lucrative for the tech titans” the government expended revenue to be in the millions.
When Spain made payments to publishers mandatory, Google chose to withdraw its Google News service entirely. In France, both Facebook and Google refused to pay for users clicking through to news sites, prompting the French competition regulator to order Google to negotiate with them.
Frydenberg acknowledged that attempts in France and Spain “haven’t been successful” but vowed the Australian government “won’t bow to their threats”.
“This is a big mountain to climb,” he said. “These are big companies that we are dealing with but there is also so much at stake, so we’re prepared for this fight.”
The communications minister, Paul Fletcher, said European regulators had relied on copyright law to extract payments, whereas Australia would use competition law.
Sims said in Spain only Google News had been targeted, not Google search, while in Australia the code would be “broad enough so that it covers the entirety of the relationship”. “And really, both parties need each other.”
Facebook Australia and New Zealand managing director, Will Easton, said the social media giant was “disappointed by the government’s announcement, especially as we’ve worked hard to meet their agreed deadline” for a voluntary code by November 2020.
Easton pointed to a global $100m fund to support journalism during the Covid-19 crisis and $5m in Australia to help news platforms monetise audiences drawn via Facebook as evidence of its support for journalism.
Google, which drove 2bn clicks to Australian news publishers in 2018, has long argued that traffic from the search engine helps publishers monetise content.
A Google spokesperson said it had worked with the news industry to help “grow their businesses through ads and subscription services and increase audiences by driving valuable traffic”.
Google said it had worked constructively with the industry, government and ACCC on the draft code and “we will continue to do so in the revised process set out by the government today”.
Earlier, Fletcher explained the government had intervened because it was a “competition issue” – that local publishers and broadcasters including News Corp, SevenWest and Nine Entertainment are “competing with Facebook and Google … for advertising revenue and attention.
“Competition delivers the best outcomes for consumers but when you have one set of businesses acquiring content from another, without the opportunity for a fair discussion about what they paid for it, then that is why we believe the ACCC needs to get involved.”
Labor welcomed the announcement but said in a statement it was “disappointing that it has taken a global pandemic for this government to find a sense of urgency about the state of Australia’s news media”.
“There is still much to work through before this code of conduct will operate to support the news media, and still much on the media reform to-do list,” the shadow communications minister Michelle Rowland and shadow treasurer Jim Chalmers said in a statement.