Global internet giants have labelled the government's plan to force them to pay media companies for content "disappointing," while a leading expert has said similar moves in other countries show how difficult it can be to enforce such regulation.
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Communications Minister Paul Fletcher and Treasurer Josh Frydenberg announced on Monday a new mandatory code of conduct would be developed by the Australian Competition and Consumer Commission, including mechanisms to force digital platforms like Google and Facebook to pay media companies for revenue generated from news content.
While the ACCC had been negotiating a voluntary code of conduct between the big digital players and Australian media companies with the intention of reporting back to the government later this year, pressures brought by COVID-19 and tumbling advertising revenue accelerated the process.
The announcement hasn't been welcomed by the digital giants, who have pushed back against claims by the government that negotiations over a voluntary code of conduct had stalled.
"We're disappointed by the government's announcement, especially as we've worked hard to meet their agreed deadline," said Will Easton, managing director for Australia and New Zealand for Facebook.
Facebook had been part of meetings with publishers in recent months and was due to submit a draft code of conduct in May, which would have included principles for sharing revenue but would have kept precise details between the social media giant and individual media companies.
A spokeswoman for Google in Australia said the company had worked for many years with the news industry to be a "collaborative partner".
"Since February, we have engaged with more than 25 Australian publishers to get their input on a voluntary code and worked to the timetable and process set out by the ACCC," the spokeswoman said.
"We have sought to work constructively with industry, the ACCC and government to develop a code of conduct, and we will continue to do so in the revised process set out by the Government today."
Mr Fletcher said he couldn't be specific about how much money could be paid from the digital platforms to the media companies or how it would be calculated.
"There are a number of different options, you can do it on a value option, or you can do it on a cost option, meaning that the tech titans would end up paying a fraction of what the cost was for producing that original content, every time that they use it," he said.
"The other alternative is in terms of the value to that particular digital platform that they get from getting eyeballs onto their sites by using that content. This is to be worked out by the ACCC over the next three months."
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The move to a mandatory code of conduct reveals the "deep distrust" between the digital platforms and media companies, according to Professor of Communication at Queensland University of Technology Terry Flew.
Professor Flew said examples like Spain and France showed the difficulties governments have faced in trying to redirect some revenue from the internet giants to media companies and no country had done so successfully.
"One of the difficulties the government will find here, is while there's concern over the power over digital platform companies, there's also concerns about the power of media companies."
Professor Flew said the government was seeking to prevent the collapse of regional media companies but was constrained in how much it could spend to do so.
"They're looking to digital platforms who are doing very well in the current situation to meet some of the burden here in that the content they carry is clearly produced by others," Professor Flew said.
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