Australia unveils law forcing tech giants to pay for news

Australia unveiled a draft law Friday to force Google and Facebook to pay news media for their content in a "world-leading" initiative sure to prompt a confrontation with the digital giants.

Treasurer Josh Frydenberg announced the "mandatory code of conduct" to govern relations between the struggling news industry and the tech firms after 18 months of negotiations failed to bring the two sides together.

In addition to payment for content, the code covers issues like access to user data, transparency of algorithms and ranking of content in the platforms' news feeds and search results.

Frydenberg said legislation implementing the code would be introduced into parliament in August and include "substantial penalties" that could cost the tech companies hundreds of millions of dollars.

While the code will eventually apply to any digital platform using Australian news content, Frydenberg said it would initially focus on Facebook and Google, two of the world's richest and most powerful companies.

Australia's initiative has been closely watched around the globe as news media worldwide have suffered in an increasingly digital economy where advertising revenue is overwhelmingly captured by Facebook, Google and other big tech firms.

The news industry crisis has been exacerbated by the economic collapse caused by the coronavirus pandemic, with dozens of Australian newspapers closed and hundreds of journalists sacked in recent months.

Facebook and Google have strongly opposed any move forcing them to share advertising revenue, hinting they could simply boycott Australian media if mandatory payments are imposed.

But Frydenberg warned that the code would prohibit any "discrimination" against Australian media by the tech companies.

"Today's draft legislation will draw the attention of many regulatory agencies and many governments around the world," Frydenberg said during a news conference, calling the proposed law "world-leading".

"It's about a fair go for Australian news media businesses, it's about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape.

"Nothing less than the future of the Australian media landscape is at stake with these changes."