Australian authorities have threatened to force two U.S based tech giants Alphabet Inc. (GOOGL) and pioneer social media network Facebook Inc. (FB) to pay the domestic media in Australia from ad revenues they generate from using local content.
The government treasurer, Josh Frydenberg, said they were left with no other option since a meeting with the two companies failed to yield any positive results regarding the subject matter.
“We understand the challenge that we face, this is a big mountain to climb. These are big companies that we are dealing with but there is also so much at stake, so we’re prepared for this fight,” said Frydenberg.
Frydenberg said he government decided to look into the matter flowing unending complains from the local media complaining how big tech firms has dominated the advertising sector which happens to be their main source of income.
The Australian government has been working with the country’s regulator Australian Competition and Consumer Commission (ACCC) to see how best they can find a solution. Further, the government ordered ACCC to formulate a compulsory code of conduct between media outlets and digital platforms.
Back in November the government had initiated a framework to come up with to come up with a voluntary code of conduct, the government announced cancellation of this initial plan further directing ACCC to submit its draft of the mandatory code by July.
After it has been submitted, the mandatory code of conduct will be presented in the parliament, thereafter it will be signed into a law.
The mandatory code of conduct will clearly highlight, sharing of data, sharing of revenue generated from news and ranking and display of news content.
Additionally, the conduct will also establish a penalty and binding dispute resolution mechanism.
Australian government claims over the past decade online advertising market has grown by at least 8 times in the country.
In response to these new developments Facebook expressed its disappointment to the Australian government.
“We’re disappointed by the government’s announcement, especially as we’ve worked hard to meet their agreed deadline. We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry,” said Facebook’s’ managing director in New Zealand and Australia.
On the other hand, Google is will remain complaint with existing and any new measures adopted by ACCC together with the Australian government.
“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,” said Google’s spokesperson.
