Australia Orders Google and Facebook to Share Advertising Revenue with Domestic Media

On Monday, April 20, 2020, Australia ordered two tech giants, Facebook Inc. (Facebook) and Alphabet Inc.’s Google LLC (Google) to share advertising revenue with local media firms. With the new move, Australia became one of the first countries to impose such a requirement for digital platforms to pay for the content they use.

Australia’s Plan to Lawsuit

Treasurer of Australia, Josh Frydenberg said the recent move of the government was initiated after talks with Facebook and Google failed to ensure a voluntary code to address complaints by domestic media, which alleged that the tech giants have enjoyed unfair advantages on advertising sector in the country.

Frydenberg told reporters in Canberra, “We understand the challenge that we face, this is a big mountain to climb… These are big companies that we are dealing with but there is also so much at stake, so we’re prepared for this fight.”

Since the talk with the tech giants failed, the government has taken steps up to the country’s competition watchdog, the Australian Competition and Consumer Commission (ACCC) urging to set a mandatory code of conduct between media outlets and digital platforms. The treasurer said that the government had earlier dropped its initial plan to legislate a voluntary code by November and has asked ACCC to submit its draft mandatory code by July instead, to be passed into legislation shortly thereafter.

Frydenberg stated that the mandatory code would include several policies such as sharing of data, ranking and display of news content, and the sharing of revenue generated from news, besides establishing penalty and binding dispute resolution mechanisms.

Online Advertising Revenue in Australia

A source reported, “Australia’s online advertising market is now worth about almost A$9 billion ($5.72 billion) a year and has grown more than eight-fold since 2005.”

An ACCC report on digital platforms published in June last year showed, for every A$100 spent on online advertising in Australia, excluding classifieds, the two tech giants received nearly a third of the total revenue. In December 2019, Australia authorities said Google and Facebook must adhere to new rules to ensure a fair competitive behavior or the government would intervene.

Facebook officials condemned the government’s move on Monday. The social media platform stated, “We’re disappointed by the government’s announcement, especially as we’ve worked hard to meet their agreed deadline.” Managing Director of Facebook for Australia and New Zealand, Will Easton said in an emailed statement, “We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships, and training for the industry.”

Meanwhile, Google officials obliged the new move and said it would continue to cooperate with plans for the media code of conduct. A Google spokesperson said, “We have sought to work constructively with industry, the ACCC and government to develop a code of conduct, and we will continue to do so in the revised process set out by the Government today.”

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