FACEBOOK and Google will have to pay media companies for the information hosted on their platforms, the Australian government has said.
The move, announced today by Treasurer Josh Frydenberg, is a world first and will see tech giants paying for content through a royalty-type system.
There have long been calls for both companies to be forced to pay if they want to post snippets of articles from online outlets on their platforms.
Media companies also claim to have lost millions of ad revenue to Google and Facebook in recent years, with almost a third of all money spent on online advertising in Australia currently going to one of the two.
In April, the country’s federal government asked its Competition and Consumer Commission to develop a binding code of conduct that would address “power imbalances between Australian media companies and … Google and Facebook.”
Speaking to reporters in Melbourne, Frydenberg said: “This is a fair move for Australian news organizations.
“It’s about ensuring increased competition, increased consumer protection and a sustainable media landscape.
“Nothing less than the future of the Australian media landscape is at stake.”
A law to implement the new system will be introduced later this year.
Responding to the announcement, Michael Miller, executive chairman of News Corp Australia, a branch of Rupert Murdoch’s News Corp, said: “As other countries speak out about the unfair and damaging behavior of tech giants, the Australian government … [is] take world-class action. ”
But Google said the move ignored the “billions of clicks” it directs to Australian media company websites each year.
“This sends a worrying message to businesses and investors that the Australian government will step in instead of letting the market work,” Mel Silva, chief executive of Google Australia and New Zealand, said in a statement.
“It does nothing to solve the fundamental challenges of creating a business model suitable for the digital age.”
The announcement comes just days after executives from four of the world’s biggest tech companies, including Facebook’s Mark Zuckerberg and Google’s Sundar Pichai, testified before the U.S. Congress to defend against allegations their companies were abusing of their market power.
The hearing came after a year-long investigation by the House Judiciary Subcommittee on antitrust, commercial and administrative law.
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The subcommittee gathered 1.3 million documents and conducted hundreds of hours of interviews to probe corporate behavior.
The exact complaints against each differ, but companies are typically accused of using their market share to drive out competitors and overburden the customers who depend on them.