The legislation could provide a framework for other countries to deal with the dominant position of the platforms.
The Australian Parliament on Thursday passed landmark law requiring global tech giants to pay for news content shared on their platforms. This is being closely monitored worldwide.
The bill was passed after a recent deal that watered down binding rules that Facebook and Google had violently opposed, and that led Facebook last week to remove all messages from its Australian platform.
“The Code will ensure that media companies receive fair compensation for the content they generate, which will help uphold public interest journalism in Australia,” said Treasurer Josh Frydenberg and Communications Minister Paul Fletcher in a joint statement. The rules will be reviewed after a year.
Google is now paying for news content that appears on its Showcase product, and Facebook is expected to pay vendors that appear on its news product, which is slated to launch in Australia later this year.
Regulators had accused the companies that dominate online advertising of withdrawing money from traditional news organizations while using their content for free.
Developed after in-depth analysis by the Australian antitrust authorities and after nearly three years of public consultation, the law could give encouragement to countries like the UK and Canada that are planning similar laws.
Large technology companies had spoken out violently against the legislation and feared that it would jeopardize their business models.
Specifically, the companies rejected rules that made negotiations with media companies mandatory and gave an independent Australian arbitrator the right to issue a cash settlement.
That prospect has been dramatically reduced by the last minute changes.
“Importantly, the code encourages parties to negotiate outside of the code, and the government welcomes progress from Google and, more recently, Facebook in reaching commercial agreements with Australian news media companies,” said Frydenberg.
Google also wanted to avoid creating a precedent where platforms should pay everyone for links, which could cause the flagship search engine to stop working.
Facebook originally claimed that it wasn’t worth paying for news and that publishers voluntarily shared content on the platform.
The two companies now have another two months to reach further agreements with news organizations and avoid binding arbitration proceedings.
Google has already closed multi-million dollar deals with local media companies, including the two largest: Rupert Murdochs News Corp and Nine Entertainment.
Facebook, which posted net profits of $ 29 billion last year, announced its first planned deal with an Australian media company, Seven West, on Tuesday.
Facebook and Google have each announced that they will each invest around $ 1 billion in news around the world over the next three years.
Law critics say it penalizes innovative companies and is a money robbery by politically connected traditional media, notably News Corp, which dominates the industry in Australia and the UK and operates Fox News in the US.
Nick Clegg, Facebook’s head of global affairs and former UK deputy prime minister, said Thursday the original bill forced Facebook to “pay potentially unlimited amounts of money to multinational media conglomerates through arbitration,” deliberately describing the relationship between publishers and Facebook not correct “.
In Australia alone, thousands of journalist jobs and dozens of news outlets have been lost in the past 10 years as advertising revenue went digital.
For every $ 100 that Australian advertisers spend today, $ 49 goes to Google and $ 24 to Facebook, according to the country’s competition watchdog.