Commentary

How Will Australia Force Facebook, Google To Pay For News?

The Australian government's plan to force Google and Facebook to pay media outlets for news in the country is likely to resonate worldwide with publishers, especially newspapers whose advertising sales have suffered during the coronavirus pandemic.

The plan may also be a partial victory for Rupert Murdoch, the media mogul who has deep roots in the Australian newspaper industry and has been a fierce critic of the Silicon Valley duopoly.

The Australian Competition and Consumer Commission is now drafting a mandatory code that will be available for review before the end of July, followed by a final version soon after that, treasurer Josh Frydenberg stated.

The code will cover sharing of consumer data, the ranking and display of news content -- and the monetization and sharing of revenue generated from news. It also will establish legal mechanisms for enforcement, penalties and binding dispute resolution.

advertisement

advertisement

One of the most baffling aspects of any such regulation is assigning a value to publisher content that appears on Facebook or Google; since neither platform really needs it to survive. As sympathetic as I am to publishers and their current plight, I have my doubts about whether revenue-sharing arrangements will work. Perhaps the publisher business model of relying so excessively on ad revenue is a relic of the 20th century.

Facebook's content mostly consists of user posts that keep people coming back to check in with their friends and family. Users can share links to publisher content on its platform, which helps to drive traffic their websites. Last year, the company also started to pay publishers for content that it began gathering in its Facebook News section.

Google provides a couple of main pathways for internet users to find publisher content: Google Search and Google News. The search platform is valuable to publishers, helping them to connect with online audiences. The key debate is whether Google helps or hurts traffic with search results.

Google has said it drives 10 billion clicks to publishers' websites and is providing an invaluable service.

Google News gathers headlines from publishers in one place, helping readers to find the latest headlines. Google doesn't have advertising in Google News, which means there isn't any revenue to share with publishers.

Still, Australia may provide an early look at how regulators can enforce revenue-sharing rules on Google and Facebook, and provide publishers with the financial lifeblood to support independent journalism that faces an existential threat.

Next story loading loading..