Google, Facebook to Be Ordered to Pay for Australian News Content

By Mike Cherney 

SYDNEY--Australia plans to require Alphabet Inc.'s Google and Facebook Inc. to pay local media organizations for their content, the latest development in a global debate over whether the tech giants are unfairly benefiting from news articles that appear on their platforms.

Details on how much the tech companies will need to pay are still being decided. Australian government officials said Monday that the country's competition regulator would determine how the payments would be calculated, which the government plans to pass into law in parliament.

"This is a battle worth fighting," Australian Treasurer Josh Frydenberg said. "We believe this is crucial for the future viability of our media sector."

Publishers have long sought compensation from Google and Facebook, which collect ad revenue based on visits to their sites and increase their traffic by including links to news articles.

In the past, the tech giants have resisted paying for content, instead making donations through philanthropic arms and arguing that publishers benefit by getting large amounts of traffic directed to them.

They have softened their stance in recent months. Facebook in 2019 said it would pay some news organizations--in some cases millions of dollars a year--to license their headlines and story summaries for a news service. Google was also in talks with publishers about licensing their content in a news product, The Wall Street Journal reported in February. And Apple Inc. last year launched a subscription-based app, Apple News+, which provides access to articles from many magazines and newspapers, including The Wall Street Journal.

Facebook on Monday said it was disappointed with the Australian government's announcement, and Google said it sought to work constructively with the Australian media industry. Both companies were working toward a voluntary agreement regarding possible compensation for news organizations and had met with publishers to discuss the issue.

The Media, Entertainment & Arts Alliance, a union for media professionals in Australia, on Monday said it supported the government's move and would scrutinize the details when they are available.

Mr. Frydenberg said the country's competition regulator--which was overseeing discussions regarding a voluntary agreement--was pessimistic that a voluntary agreement would be reached. Australian officials said a solution is needed soon given that economic disruption from the coronavirus pandemic is putting fresh financial pressure on local news organizations.

Some publishers, including News Corp, which owns The Wall Street Journal publisher Dow Jones & Co. and is also a dominant player in Australian media, have stopped printing physical copies of local Australian newspapers in the wake of the pandemic.

Mr. Frydenberg said the tech companies could be required to pay for a fraction of the cost incurred by publishers for producing content, or to make payments based on the value they receive from using third-party content. He said the figure would be in the millions of dollars, but declined to be more specific.

"Journalism is vital in a democracy, but journalism costs money to produce," said Paul Fletcher, Australia's communications minister.

Other countries have also sought to compel the big tech companies to pay publishers for content. Spain passed legislation to require Google to pay news outlets, but the company responded by shutting down its local Google News service in 2014. Last year, France sought to use a European Union copyright directive to compel Google to pay to show previews of articles, but Google said it would only display headlines in its news search results to avoid paying.

Australia's conservative government, led by Prime Minister Scott Morrison, has taken a tough stance toward tech companies in the past. After last year's mosque shootings in Christchurch, New Zealand, which left 51 people dead and was partly livestreamed on Facebook, the government passed legislation that would penalize social-media companies for not removing such violent content quickly.

But Australian authorities have also taken an antagonistic approach to the media. Last year, the Australian Federal Police raided the offices of the Australian Broadcasting Corp., which is publicly funded, and the home of a News Corp journalist. This month, the country's High Court ruled that the warrant for the News Corp raid was invalid.

James Glynn contributed to this article.

Write to Mike Cherney at [e-mail]

(END) Dow Jones Newswires

April 20, 2020 04:15 ET (08:15 GMT)

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