The final changes to the so-called News Media Negotiating Code negotiated on Tuesday between Treasurer Josh Frydenberg and Facebook Chief Executive Mark Zuckerberg were approved by Parliament on Thursday.
Facebook decided to lift a ban on Australians viewing and posting news in exchange for the reforms.
Google, Facebook Now Pay For News In Australia
The competition regulator who drafted the code, Rod Sims, said he was pleased that the revised legislation would fix the gap in the market between Australian news publishers and the two internet gateways.
“All signs are good,” Sims remarked.
The code aims to deal with the market influence that Google and Facebook obviously have. The Australian Competition and Consumer Commission chair added that Google and Facebook need newspapers, but they don’t need any specific media business, and that meant that media companies couldn’t do commercial deals.
The remainder of the legislation was passed earlier in Parliament, so it can now be applied.
In recent weeks, Google has already signed deals with major Australian news firms, including News Corp. and Seven West Media.
Frydenberg said he was happy to see progress in reaching commercial agreements with Australian news companies, by Google, and recently, Facebook.
But Country Press Australia, which serves 161 regional newspapers nationally, has raised fears that it may be losing out on tiny publications outside major cities.
He was not shocked that the platforms would first make deals with the big city corporations, Sims said.
Sims said that he saw no reason why anyone should suspect that it would help all journalism.
Some things require time. There are no infinite opportunities for Google and Facebook to go around talking to others. I think there’s a long way to play this out,’ he said.
Chris Moos, a lecturer at the Business School of Oxford University, said the new amendments were a “small win” for Zuckerberg.
Moos said that for most Australian news publishers, the law would likely result in small payouts. But if talks break down, Facebook could again block Australian news.
The law was intended to curb Facebook and Google’s outsized bargaining power in their dealings with Australian news providers. By making take-it-or-leave-it payment deals to news publishers for their journalism, the digital giants will be unable to exploit their positions. An arbitration tribunal will instead make a binding decision on a winning bid in the case of a standoff.
Frydenberg and Facebook announced that changes to the new law had been agreed upon by the two parties. The modifications will offer one month’s notice to digital channels before they are officially designated under the code. That would allow more time to broker negotiations for those involved before they are required to enter into binding arbitration arrangements.
“Nick Clegg, Facebook Vice President of Global Affairs, said on Wednesday that without this week’s changes, the Australian law would have allowed media conglomerates to “demand a blank check.”
Clegg, a former British deputy prime minister, wrote in a Facebook post, “Thankfully, after further debate, the Australian government has agreed to reforms that ensure fair negotiations are encouraged without the looming danger of heavy-handed and volatile arbitration.”
Last week, Facebook stopped Australians from sharing news, but also blocked access to emergency services, public health, and pandemic services.
The blockade was a reaction to the passage of the code last week by the House of Representatives in a way that Facebook found “unworkable.”
“Clegg said that Facebook had “erred on the over-enforcement side” and “some content was unintentionally blocked.
Under their licensing models, Google News Showcase and Facebook News, both Google and Facebook are seeking Australian media deals.
Yet media executives claim that such agreements would not be feasible without the possibility of final decisions being taken by an arbitration tribunal.
Frydenberg said his department would review the code within a year to “ensure that results that are consistent with the policy intent of the government are delivered.”