Australia will force Facebook Inc and Alphabet Inc’s Google to share advertising revenue with local media firms, the country’s treasurer said on Monday, becoming one of the first countries to require digital platforms to pay for content they use.
Treasurer Josh Frydenberg said 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,” 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.”
The government has now asked the country’s competition watchdog, the Australian Competition and Consumer Commission 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 ACCC to submit its draft mandatory code by July, to be passed into legislation shortly thereafter, the treasurer said.
Frydenberg 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 about almost A$9 billion ($5.72 billion) a year and has grown more than eight-fold 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.