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Google and Facebook are rushing to reach an agreement with Australian publishers, offering them the most generous licensing terms in the world in an attempt to persuade Canberra not to apply rules that compel tech groups to pay for news.
Parliamentarians began debating legislation on Wednesday to enact the news media negotiation code, which the EU, the UK and Canada are considering as a model for similar regulations to support publishers in their own jurisdictions.
Although Google has multimillion-dollar licensing agreements with publishers in nearly a dozen countries, people involved in the negotiations told the Financial Times that the sums now under discussion in Australia were “several times” larger than those agreements.
Developments in Australia are being watched closely in Europe and the United States for evidence that a tougher approach will redefine the balance between publishers and technology platforms. Among the features of the code is an arbitration system that would make binding decisions about the fees that Facebook and Google would have to pay news providers if business negotiations failed.
Google signed a letter of intent on Wednesday with Nine Entertainment, one of Australia’s largest media groups, which describes a draft agreement to use the content of its newspapers, television and Internet assets, according to one person directly familiar with the business.
The technology group said on Wednesday that it also struck a deal with Junkee Media to curate the small publisher’s online content on its recently launched News Showcase service.
They followed a similar agreement on Monday with Seven West Media, a group with TV, newspaper and digital assets that is reported by Australian media to be worth A $ 10 million to A $ 30 million ($ 7.7 million to $ 23 million) per year. By comparison, Google’s recent framework agreement in France with more than 100 publishers is worth about € 22 million ($ 26.5 million) a year in total, according to people familiar with the business.
News Corp and Google by Rupert Murdoch are also in talks about a possible global content deal, according to people with knowledge of the talks.
Experts said the partnerships reflect Google’s desire to ensure that Canberra does not apply the most difficult elements of the code to its main search function, which the US group has warned could be forced to close in Australia.
“Google is desperate not to pay for news delivered through its search engine. It looks like they’re paying above market value to secure deals that specifically exclude Google Search, ”said James Meese, professor of communications at RMIT University in Melbourne.
Canberra and Google may be reaching some kind of “tacit agreement,” he added, whereby the government would not apply the code to the technology giant’s search function if it signs enough agreements with publishers.
Josh Frydenberg, Australia’s treasurer, said that none of the trade deals would have been closed without the code, which started a “historic moment” for news companies. The legislation would be passed by parliament, but the government would decide whether it would apply to Google’s search service or Facebook, he said.
“Regarding the Google Search or Facebook designation, these are decisions I would make after receiving the advice” from Australia’s competition regulator, he told Sky. “But if there are trade deals going on, it becomes a different equation for me.”
Google and Facebook have not released details about how much their deals with publishers are worth, but they are not expected to reach the AU $ 1 billion a year that News Corp has signaled to technology groups owed to Australian media owners.
Google last year pledged $ 1 billion over three years to pay global publishers and said it had reached an agreement with 450 “news partners”.
Facebook has made less progress in signing deals with publishers, although it remains in negotiations, said people directly familiar with the matter.
The Sydney Morning Herald, the Nine newspaper that first reported on the draft agreement between Google and its parent company, said it would be worth more than AU $ 30 million a year.
Additional reporting by Richard Waters in San Francisco and Alex Barker in London.
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