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Australia passes law forcing Google and Facebook to pay news publications

After a tumultous month that saw Facebook pull news from its platform in protest, Australia's government agrees to make the News Media Bargaining Code law.

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Australia on Wednesday passed a new media law that had generated noisy pushback from internet giants Google and Facebook, which didn't want to be forced to pay publishers for news content.

After a last-minute round of Senate amendments were added to the bill on Tuesday, the bill was sent back and quickly passed to the lower house on Wednesday. Under the new law, called the News Media and Digital Platforms Mandatory Bargaining Code, Google and Facebook are required to negotiate licensing agreements with publishers for the news articles that appear on Google search and Facebook's feed. 

The routine vote on the Code belies a half year of conflict between Australia and the internet titans. At one point, Google threatened to pull its search product out of the country, only to meekly cut deals with Australia's biggest publishers for an estimated total of well over AU$60 million ($47 million). Similarly, Facebook took the unprecedented step of cutting news out of feeds in Australia for five days before pledging to restore it after the government offered concessions to the code. Facebook says it will begin to restore Australian news before the weekend. 

"This legislation will help level the playing field and see Australian news media businesses paid for generating original content," said Australian Treasurer Josh Frydenberg, a key figure in negotiating with Mark Zuckerberg and Sundar Pichai, the heads of Facebook and Google respectively. 

The Australian law will almost assuredly inspire similar legislation around the world as governments reckon with rapidly changing media environments. Canadian Prime Minister Justin Trudeau has said he intends to "ensure the revenues of web giants are shared more fairly with creators and media." Ministers in the UK and EU have cited Australia's example as inspiration for potential future legislation. France already has already implemented an EU copyright law with aims similar to the Code. 

Google didn't respond to a request for comment. Nick Clegg, who oversees Facebook's global affairs, said Wednesday in a blog post that news publishers benefit from the social network. "It is understandable that some media conglomerates see Facebook as a potential source of money to make up for their losses, but does that mean they should be able to demand a blank check?" he wrote. 

Under the media code, Facebook and Google will have 90 days to reach compensation agreements with news publishers. If they fail to do so, an arbitrator will issue a binding decision. Last-minute amendments to the law, however, mean both Facebook and Google can escape being subject to its provisions. Facebook also retains the ability to pull news from its Australian platform -- again -- if it deems terms unfavorable. 

Public negotiations

After threatening to pull search out of Australia if it's forced to pay publishers per-link-click, Google last week began signing commercial agreements with the Code's biggest supporters. A deal with Nine Entertainment, which owns a TV network, radio stations and several print publications, is reported to be worth over AU$30 ($23 million) million a year. Seven West, another local media giant, cut a deal reportedly worth a similar amount. These were followed by global agreement with Rupert Murdoch's News Corp., which along with Nine lobbied the government to pass the bill. 

The row over the Code reached its zenith on Feb. 17, when Facebook unilaterally prevented Australian publishers from sharing their work and stopped displaying news to Australian users. About 39% of Australians use Facebook news, according to a 2020 digital news report from the University of Canberra's News and Media Research Centre, roughly on par with the global average of 42%.

Morris Short, a 59-year-old Australian real estate agent, said scrolling through his Facebook News Feed was part of his morning routine while sipping coffee. After Facebook restricted access to news, Short curtailed his use of the social network, visiting Apple News and news.com.au to keep up with events. 

He also had difficulty managing the Facebook page for Re/Max Xtra, the real estate company he owns. Sometimes he's able to post on the page, other times he can't.  

"It was a fairly blunt instrument," Short said. "I think there was a lot of collateral damage."

Some of that damage included the Facebook Pages for government agencies, nonprofits and other organizations. When Facebook blocked news from its Australian platform, pages for official agencies like Queensland Health and the Bureau of Meteorology also went blank. Most prominent pages have been restored, but smaller ones like Short's are often still affected. 

Dhayana Sena, a 30-year-old marketing manager in Australia, manages and posts gaming content on a Facebook page called Attack on Geek, which Australians had difficulty viewing after the restrictions went into effect. Sena, who hasn't been able to get the block reversed, said she can't livestream gaming videos for charity elsewhere because Attack on Geek has an exclusivity contract with Facebook Gaming. 

"This is a big eye-opener that you shouldn't just use one app or one provider for everything," she said. "You should diversify as much as possible." 

After Facebook cut news from Australian users, the country's treasurer continued negotiations with Zuckerberg. That lead to Facebook committing to reversing its news blockade on Monday in exchange for amendments to the code. Three changes loosen the media code's grip, particularly on Facebook.

First, officials must consider whether a company has "made a significant contribution to the sustainability of the Australian news industry" via voluntary commercial agreements before designating it a "digital platform" subject to the law. Second, companies that are designated as digital platforms are given a 30-day notice, providing time to strike deals with publishers. Third, the code only applies to platforms that intentionally make news content available. 

This means that if Facebook inks the right deals with enough publishers, it could evade being subject to the rest of the law's provisions. Failing this, the government would have to give Facebook a month's notice before it's officially subject to the code, a period in which it could pull news from the social network.