Amidst the ongoing coronavirus spread, treasurer of Australia- Josh Frydenberg- has ordered country’s competition watchdog to develop a code of conduct for two prominent tech companies, Google and Facebook. The conduct apparently will enforce the companies to share advertising revenue with domestic media firms for using their content. In fact, with this law amendment, Australia has emerged as one of the first countries forcing digital platforms to pay for content they use.

According to the treasurer, this move comes just after talks with Google and Facebook failed to yield a voluntary code to address pleas of domestic media players regarding the tech giants’ tight hold on advertising, which is also their main source of income.

Australia’s online advertising industry is worth nearly A$9 billion or USD 5.72 billion a year and has increased more than eight fold since 2005. For every A$100 spent on online advertising in the nation, over one-third goes to Google and Facebook. In this regard, the Australian government, last December, announced that both these companies would have to agree to new rules in order to ensure that they do not abuse their dominance and damage competition, or the government would be bound to impose new controls.

In this matter, the ACCC is expected to submit its draft obligatory code by July to the government, which would be passed into legislation shortly thereafter. Commenting on this, the ACCC Chairman, Rod Sims, stated that the need for this law is felt by people who have invested a hefty amount in journalism and media to provide the content which these tech companies are providing to consumers for free.

While this action would bring relief to various domestic ad firms, Facebook has expressed dismay at this move. In an official statement the tech firm quoted that it was extremely disappointed by government’s announcement especially as the management has worked immensely hard to meet the agreed deadline. In line with this, Will Easton, the Facebook Australia and New Zealand MD stated that the company has invested considerable amount of money to support Australian publishers through content arrangements, training, and partnerships for the industry and this move is not less than a disappointment for it.

Meanwhile, Google has announced continuing to cooperate with the plans for media code of conduct.

Source credit: https://business.financialpost.com/pmn/business-pmn/australia-plans-law-forcing-google-facebook-to-share-ad-revenue-with-domestic-media-firms