Wednesday, August 12, 2020
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Australia law forcing Google, Facebook to pay media houses

In a bid to help the struggling media houses, the Australia government has introduced legislation that forces technology giants Google and Facebook to pay them regularly for publishing their content.

The one-of-its-kind draft is the world’s first and is expected to ignite retaliation and dismissal from the renowned companies.

Josh Frydenberg, the Treasurer of Australia released his statement and the “mandatory code of conduct” made to administer the association between the news businesses of the continent and the tech firms of United States of America after it spent over 1 and a half year trying to get the parties on one mutual agreement.

The draft requires Google and Facebook to negotiate with the media houses for using their material. This also includes access to user data, transparency of algorithms, and ranking of content in the platforms’ news feeds and search results.

During a press conference, Mr. Frydenberg spoke about the “fair” policy, “It’s about a fair go for Australian news media businesses. It’s about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape.”

He added that they are currently starting with these two tech companies but others could also have to follow suit.

Google said that this heavy move could hamper the digital economy system to a great extent. Both companies, the world’s two biggest sellers of online ads, have spent years fending off demands from news media around the world for a share of the advertising revenue.

Australian Competition and Consumer Commission has drawn a draft that can be reviewed until August 28th. The Treasurer said that the draft will be presented in the parliament soon and can be put into action by the end of 2020.

Hundreds of millions of dollars could be levied as a “penalty” on the tech behemoths a well, Mr. Frydenberg said.

With Google, Facebook, and large-scale companies sucking up the revenues of the advertising agencies which once helped them grow; global attention on the matter has only increased.

The coronavirus pandemic has forced shut a bunch of Australian media houses due to the economic collapse, sinking the already suffering market.  However, on the other side, technology companies have continued to raise profits amid every crisis.

On Thursday, Facebook announced its net profit coming up to $5.2 billion for the months of April, May, and June, because its ad sales soared to $18.3 billion, a 10% increase. Alphabet’s Google said that after a short decrease in profits, its online ad sales were rising. Its second-quarter profit was above expectations at nearly $7 billion.

The tech companies hinted that they would boycott the Australian news if any draft was tried to get implemented, forcing them to give a part of their revenue. The highly criticized the move which fixed the mandatory payments.

However, Frydenberg warned that this strategy will stop the ‘discrimination’ by technological firms against the Australian media.

“Today’s draft legislation will draw the attention of many regulatory agencies and many governments around the world,” he said, calling the proposed law “world-leading. Nothing less than the future of the Australian media landscape is at stake with these changes,” he said.