Facebook and Google will have to PAY for hosting news content, Australia rules in world first

FACEBOOK and Google will have to pay media companies for news hosted on their platforms, the Australian government has said.

The move, announced today by Treasurer Josh Frydenberg, is a world-first, and will see the tech giants pay for content through a royalties-style system.

There have long been calls for both companies to be made to pay if they want to publish snippets of articles from online outlets on their platforms.

Media companies also say they have lost millions in advertising revenue to Google and Facebook in recent years, with almost a third of all cash spent on online advertising in Australia currently going to one of the two.

In April, the country’s federal government asked its Competition and Consumer Commission to develop a mandatory code of conduct that would address “power imbalances between Australian news media businesses and… Google and Facebook”.

Speaking to reporters in Melbourne, Frydenberg said: “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.”

A law to enforce the new system will be brought in later this year.

Responding to the announcement, Michael Miller, Executive Chairman of News Corp Australia, a branch of Rupert Murdoch’s News Corp, said: “While other countries are talking about the tech giants’ unfair and damaging behaviour, the Australian government… [is] taking world-first action.”

But Google said the decision failed to take into account the “billions of clicks” it directs to the websites of Australian media companies every year.

“It sends a concerning message to businesses and investors that the Australian government will intervene instead of letting the market work,” Mel Silva, managing director of Google Australia and New Zealand, said in a statement.

“It does nothing to solve the fundamental challenges of creating a business model fit for the digital age.”

The announcement comes just days after the heads of four of the world’s biggest tech companies, including Facebook’s Mark Zuckerberg and Google’s Sundar Pichai, testified in the US Congress to defend themselves against allegations that their firms were abusing their market power.

The hearing came after a year-long investigation by the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law.

The subcommittee gathered 1.3million documents and conducted hundreds of hours of interviews to probe the behaviour of the companies.

The exact complaints against each differ, but the firms are broadly accused of using their market share to push out rivals and overcharge the customers who are dependent on them.