With no hope of getting Google and Facebook to pay for the use of publishers' content, the Australian government has brought forward plans to legislate to force the issue.
Overnight, treasurer Josh Frydenberg and communications, cyber safety and the arts minister Paul Fletcher announced the government is to bring deadlines forward for a code of conduct to address bargaining power imbalances, and will legislate to make it mandatory.
Meeting the issue "head on" follows challenges by European governments in Spain and France, and an EU directive on the copyright of content reproduced online. Google responded to Spanish legislation by shutting Google news, while in France the search giant said it would not pay for content and not display French news media unless able to do so free.
In this context, Frydenberg says Australia is "under no illusions as to the difficulty and complexity of implementing a mandatory code to govern the relationship between the digital platforms and the news media businesses.
"However, there is a need to take this issue head-on."
Although the threat of legislation had been reserved until November, following a report by competition regulator the ACCC that there had been no meaningful progress and "no expectation of any even being made", the government has brought forward the deadline to July.
A statement from the offices of Frydenberg and Fletcher says the government has decided that the original timeframe "requires acceleration" given the sharp decline in advertising revenue driven by coronavirus on top of significant pressure the Australian media sector was already under.
"As a result, the Government has instructed the ACCC to develop a mandatory code to address commercial arrangements between digital platforms and news media businesses," it says. "Among the elements the code will cover include the sharing of data, ranking and display of news content and the monetisation and the sharing of revenue generated from news.
"The mandatory code will also establish appropriate enforcement, penalty and binding dispute resolution mechanisms."
A draft code for consultation will be released before the end of July, with a final code "to be settled soon thereafter".
The regulatory framework will be "fit for purpose" and better protect and inform Australian consumers, addressing bargaining power imbalances between digital platforms and media companies, and ensuring privacy settings remain appropriate in the digital age, it says.
News Corp Australasia executive chairman Michael Miller said a mandatory code that leads to platforms paying "a fair and very significant price" should be put in place urgently. "The Australian media industry is at a tipping point," he said.
"It is essential the mandatory code corrects the power imbalance between the tech platforms and local news media companies, and sets rules that lead to the platforms finally paying for the news content they take and profit from."
Miller says the platforms have had "many years to act fairly and have chosen not to", making steps such as those proposed by the Australian government finally necessary.
"For two decades, Google and Facebook have built trillion dollar businesses by using other people's content and refusing to pay for it. Their massive failure to recognise and remunerate creators and copyright owners has put at risk the original reporting that keeps communities informed," he said.
Miller says the "rush of audiences back to trusted news sources" during the COVID-19 crisis "has been a powerful reminder that real journalism must not be destroyed by companies that take it for their own use and refuse to pay".
Hugh Marks, chief executive of Nine Entertainment - which publishes The Age and the Sydney Morning Herald - has praised the government for taking "taking swift and decisive action" on the issue. In the Australian Financial Review (which Nine also owns) he said even small percentages would be material. "With roughly $6 billion of revenue in this market, if you're starting to look at 1 per cent, that would be $60 million. Obviously we will be arguing for higher than the platforms will be willing to suggest," he said.
Both Google and Facebook have issued statements denying that they had failed to engage in discussions.
Pictured: Treasurer Josh Frydenberg announces the measures today
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