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Facebook, Google Required to Pay for News Content by New Australian Law

New law will ”ensure that news media businesses are fairly remunerated for the content they generate“

Australia passed a new law on Thursday that will force tech companies to pay news outlets for their content, a law that, if copied around the world, could have a dramatic impact on Facebook and Google’s businesses.

The two tech giants had already been pushing back against Australia’s new law before it became official, with Facebook recently going as far as to block all Australians from sharing news on the platform. Facebook, after about a week, reversed its decision on Monday, after Australian lawmakers offered a few concessions to the company and Google, including giving the tech giants more time to negotiate with news outlets before disagreements are sent to an arbitrator. Arbitration will only be used as a “last resort” if a deal isn’t reached after a period of “good faith” negotiations, according to CNN.

Australia’s new law also gave tech companies a bit more wiggle room, saying it “must take into account whether a digital platform has made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements” with news outlets.

“The code will ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia,” Australian Treasurer Josh Frydenberg and Communications Minister Paul Fletcher said in a statement.

The new law will be reviewed a year from now by Australia’s treasury department. Even before it was finalized on Thursday, though, Google and Facebook have been proactively working to get ahead of it, with Google striking a deal with News Corp. earlier this month that’ll let it feature content from outlets like The Wall Street Journal, The New York Post and Financial Times. Facebook, meanwhile, came out on the offensive on Wednesday, with VP Nick Clegg saying the proposed law was “unworkable” if it didn’t include key amendments.

“The events in Australia show the danger of camouflaging a bid for cash subsidies behind distortions about how the internet works,” Clegg said in a blog post.

Moving forward, it’ll be worth seeing if American politicians push for Facebook to compensate news outlets in the U.S. A bill similar to Australia’s law has been floating around for more than a year. The “Journalism Competition and Preservation Act,” introduced in the House in April 2019, would allow publishers to collectively negotiate with tech companies over their content. The bill has the support of the News Media Alliance and its roughly 2,000 member organizations, but to this point hasn’t gained momentum to get across the finish line. Millions of Americans rely on Facebook as a primary news source. A 2019 Pew survey found 43% of Americans get their news from Facebook.