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Big Tech Will Pay For Aussie News Content

The government’s News Media Bargaining Code is set to be introduced to Parliament today, and will force Facebook and Google to negotiate with media outlets on how much they pay for news content on their sites.

The ABC and SBS will be included alongside commercial broadcasters and print media in the code, which will initially bind Facebook Newsfeed and Google Search, but not other online services such as Instagram and YouTube.

According to federal Treasurer Josh Frydenberg, the hope is that good-faith commercial arrangements will be struck outside the purview of the code.

“If the digital platforms and the news media businesses are unable to reach a commercial agreement, or unwilling to reach a commercial agreement, then a final offer arbitration model will take effect. And this final offer arbitration model will allow for what is called two-way value exchange,” he said.

The two-way value exchange is a big win for Google and Facebook, who lobbied for the code to consider the advantages media outlets receive from exposure on their platforms.

“The money can only go one way”: Josh Frydenberg.

“The money can only go one way, the money can only go from the digital platforms to the traditional news media businesses. But the arbiters need to take into account the benefits that traditional news media businesses get by having eyeballs on their product when they appear on Google and Facebook,” said Frydenberg.

According to an ACCC review in 2017, out of every $100 spent on online advertising, $53 goes to Google and $28 to Facebook, with other participants carving up the remaining $19.

“As a result of this concentrated market, these digital platforms were unavoidable trading partners for traditional news media businesses,” said Frydenberg.

Communications Minister Paul Fletcher added that, over the course of the COVID-19 pandemic, Australians had returned to “trusted sources of news”, giving major spikes to outlets such as News Corp, Nine, and the ABC.

“What this code is designed to do is to be an effective policy tool so that Australia news media businesses receive fair payment for their content that is used by the digital platforms and so, in turn, that they can continue to provide public interest journalism about things that are important to Australians,” he said.

Reactions among media outlets have been mixed, with News Corp hailing the Code as a “significant step forward” that will remove barriers to fair commercial agreements, while Nine slammed it as entrenching “both [tech companies’] monopoly power and the significantly unfair imbalance in regulation”.

The Code will go to Parliament today, and then to a Senate committee.

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