CANBERRA, Australia (AP) – The Australian law that forces Google and Facebook to pay for news is set to go into effect, although the architect of the laws said it will take time for digital giants to close deals with the media.
Parliament approved on Thursday the final amendments to the so-called News Media Trading Code, agreed between treasurer Josh Frydenberg and Facebook Chief Executive Mark Zuckerberg on Tuesday.
In exchange for the changes, Facebook agreed to lift the ban on Australians accessing and sharing news.
Rod Sims, the competition regulator who drafted the code, said he was happy that the amended legislation resolved the market imbalance between Australian news publishers and the two Internet access portals.
“All signs are good,” said Sims.
“The purpose of the code is to address the market power that Google and Facebook clearly have. Google and Facebook need media, but they don’t need any particular media company, and that means media companies cannot make commercial deals, ”added the chairman of Australia’s Consumer and Competition Commission.
The rest of the law was passed in Parliament before, so it can now be implemented.
Google has already struck deals with major Australian news companies in recent weeks, including News Corp. and Seven West Media.
Frydenberg said he was pleased with the progress of Google and, more recently, Facebook, in reaching business deals with Australian news companies.
But Country Press Australia, which represents 161 regional newspapers across the country, raised concerns that small publications outside major cities could be left out.
Sims said he was not surprised that the platforms closed deals with major companies in the city first.
“I see no reason for anyone to doubt that all journalism will benefit,” said Sims.
“Things take time there. Google and Facebook don’t have unlimited resources to talk to everyone. I think we still have a long way to go ”, he added.
Chris Moos, a professor at the Oxford University School of Business, said the latest amendments represented a “small victory” for Zuckerberg.
Moos said the legislation would likely result in small payments to most Australian news publishers. But Facebook can block Australian news again if negotiations fail.
The legislation was designed to contain the enormous bargaining power of Facebook and Google in their dealings with Australian news providers. The digital giants would not be able to abuse their positions by making pay-as-you-go offers for news companies for their journalism. Instead, in the event of a stalemate, an arbitration panel would make a binding decision on a winning bid.
Frydenberg and Facebook confirmed that the two sides agreed to changes to the proposed legislation. The changes would give digital platforms a month’s notice before they were formally designated under the code. This would give stakeholders more time to negotiate deals before they are forced to enter into binding arbitration deals.
Facebook Vice President of Global Affairs Nick Clegg said on Wednesday that Australian law, without this week’s amendments, would have allowed media conglomerates to “demand a blank check.”
“Fortunately, after further discussion, the Australian government has agreed to changes that mean that fair negotiations are encouraged without the imminent threat of heavy and unpredictable arbitration,” Clegg, a former British deputy prime minister, wrote in a post on Facebook.
Facebook last week prevented Australians from sharing news, but it also blocked access to the pandemic, public health and emergency services.
The block was a response from the Chamber of Deputies that approved the code last week in a way that Facebook considered “impractical”.
Clegg said Facebook “erred by oversight” and “some of the content was inadvertently blocked”.
Both Google and Facebook are seeking Australian media deals with their own licensing models, Google News Showcase and Facebook News.
But media executives argue that such deals would not be possible without the threat of an arbitration panel making final decisions.
Frydenberg said his department will review the code within a year to “ensure that it is delivering results consistent with the government’s policy intent.”