In a move that could act as precedent for other governments globally, the Australian government is planning a new legislation, that would make it mandatory for Facebook, Google and the likes to pay local media outlets. These remunerations will be for all content that Google/Facebook conveniently show on their respective news feeds.

According to the proposed legislation, digital platforms will carry out negotiations with media companies for extracting content from them. Thus, if Facebook or Google want to display a news story that is the property of an Australian media outlet, the companies would have to ‘buy’ the news from them. If the concerned parties cannot find common ground in three months, then an independent arbitrator would take the final binding decision.

This would make Australia the first country ever to make the global digital giants pay for local content. Although some countries in Europe have tried to make tech giants pay independent journalists, but those efforts have been in vain. News and media companies, which are infamous for running in losses, have been hit hard by the coronavirus pandemic and this move hopes to protect independent journalism and will set an example for other countries to follow. The motive, according to Treasurer Josh Frydenberg was not to protect Australian businesses from competition or disruption but to ensure they are paid fairly for original content.

This move to help journalism is part of a bigger initiative by the Australian government.  Frydenberg introduced the “mandatory code of conduct” for big tech giants. Apart from making Facebook and Google pay for local content this “code of conduct” covers issues like user data, transparency of algorithms and ranking of content in the platforms’ news feeds and search results. However, it is important to note that this code is still in the drafting stage and has not been passed by the Australian parliament as of now. The draft will be open to consultation until 28th august 2020.

“There is a fundamental bargaining power imbalance between news media businesses and the major digital platforms. News businesses have no option but to deal with the platforms, and have had little ability to negotiate overpayment for their content or other issues,” said Rod Sims, the chair of the competition regulator, the Australian Competition and Consumer Commission in a statement to the Wall Street Journal.

As expected, the companies are not happy with the decision. Mel Silva, managing director of Google Australia and New Zealand told Reuters that the move sends a concerning message to businesses and investors that the Australian government will intervene instead of letting the market work. He argues that the new change does nothing to solve the fundamental challenges of creating a business model fit for the digital age.