Australia sets worldwide precedent by passing pay‐to‐play legislation for social media giants

In a landmark decision, Australia is now requiring global digital giants, such as Facebook and Google, to pay for using local news content on their websites. The move sets a precedent that many global companies have been anticipating.

The law passed yesterday after Facebook and Google reached an agreement to pay local Australian news organisations for using their stories on their websites. 1 week ago, Australians woke up to a blackout after Facebook temporarily banned local news, which included emergency notifications. The blackout was in response to the legislation being put forth for approval, with Facebook spokespeople saying it seemed to be their only choice at the time.

The new law sets the stage for other countries worldwide to gain more revenue for local media companies by making such social media giants pay to use content. Google’s “Showcase” product will now feature paid local news with Facebook showing such paid news under its “News” category.

Companies like Google and Facebook pushed back against the legislation, saying such a law could threaten their companies’ business models, with Google saying it could make their search engine website “unworkable.”

But local news organisations have rebuked the reasoning, citing that social media giants claim a large percentage of online advertisin, leaving local news companies out of the revenue game. Citing that news is gathered by reporting and fieldwork, the companies say it is unfair for social media companies to profit largely off of the work of local, smaller companies.

The law, called the News Media and Digital Platforms Mandatory Bargaining Code, aims to protect such local companies and to sustain public interest journalism. Thousands of journalists have lost their jobs over the past decade as local media outlets have seen the bulk of their advertising revenues flow to digital companies’ sites after using their content.

Australia’s competition watchdog says that for every $100 invested by Australian advertisers, $49 is sent to Google and $24 to Facebook. Now, both online businesses say they will each invest around US $1 billion in local news content globally in the next 3 years. Facebook and Google now have 2 more months to reach solid agreements before being subjected to binding arbritations.

SOURCE: The Phuket News

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Ann Carter

Ann Carter is an award-winning journalist from the United States with over 12 years experience in print and broadcast news. Her work has been featured in America, China and Thailand as she has worked internationally at major news stations as a writer and producer. Carter graduated from the Walter Williams Missouri School of Journalism in the USA.

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