Google and Facebook will be forced to pay media for news with new law.

Australia is currently in a battle with Alphabet’s Google and Facebook as it tries to implement new legislation that will make them pay media publishers for the right to run their content on the digital platforms. If the Australian government passes this law, the tech-giants would see themselves having to negotiate a fair payment with news publishers.

In 2019, the majority of Google’s $162 billion revenue came from advertising. This shows that Google and Facebook earn most of their revenue from advertisements. The digital platforms are doing very well but at the expense of traditional media companies as they’ve lost competition to the tech-giants. A number of traditional companies in Australia have shutdown business due to less advertising revenue.

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Newspapers in Australia believe Google and Facebook make money from news and analysis in search results or news feeds provided by media organizations. Without this, they believe there would not be much use for the platforms.
The legislation that’s being closely watched worldwide would be a game-changer for many media publications world over if it’s actually passed.

How would the law work?

Currently, media publishers can make commercial deals with Google and Facebook where the publishers settle for any price. What the law will ensure is that both parties negotiate and reach a binding agreement that will lay out terms and conditions of working together and a set price as remuneration.

Where the parties fail to agree, an arbitration agreement will be implemented by a government-appointed arbitrator who will determine the level of remuneration.

How Google and Facebook responded.

Tech-giant Google threatened that it would block its search engine in Australia if the government continued to pursue the law that would force it to negotiate payments with local publishers and broadcasters. It made the threats on claims that its 19 million users would get degraded search and YouTube experience if the code was enforced.

Ms Mel Silva, Google’s Managing editor in Australia said, “If the code becomes law, Google would have no real choice but to stop providing Search in Australia. That’s a worst-case scenario and the last thing we want to have happen especially when there is a way forward to a workable code that allows us to support Australian journalism without breaking search.”

Australian Prime Minister, Scott Morrison said the country makes its rules for things you can do in Australia and will not respond to threats.

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