Under Pressure From Australia, Facebook and Google Make Opposite Moves

Australia’s proposed legislation that will make tech giants pay local media firms for news has not yet become law. But already it is sparking historic – and contrasting – reactions from Google and Facebook, the world’s two largest vectors for digital advertising.

The proposed News Media Bargaining Code was born of a study from the Australian Competition and Consumer Commission in April last year. It concluded that the tech giants should pay for the links to news and news stories that they carry. Since then, the idea has been rumbling towards legislation through consultations and feisty hearings. Australia’s lower house of parliament, The House of Representatives, approved the latest draft on Wednesday. The upper house, the Senate, will consider it in the coming days.

With the legislators in Canberra having shrugged off threats – earlier this month Google said it would withdraw search functions in Australia – and the bill’s passage into law now seemingly inevitable, the various different players are making their moves.

Throughout this week, it has emerged that Google has been signing deals under which it will make lump sum payments to Australian media organizations. It unveiled similar deals in France in recent weeks. The Down Under deals include ones with heavyweight Seven West Media and, on Wednesday night, News Corp.

The Rupert Murdoch-headed company, which is Australia’s largest publisher and also controls The Wall Street Journal, said that it had agreed a wide-ranging three-year deal with Google.

Other Google deals with Nine Entertainment (which gobbled up newspaper publisher Fairfax two years ago) and the state-owned Australian Broadcasting Corporation are also being negotiated.

Only hours later, Facebook headed off in the other direction. This despite a recent mano-a-mano conversation between Facebook’s Mark Zuckerberg and Australian finance minister Josh Frydenberg.

Overnight, Facebook announced that it “will restrict publishers and people in Australia from sharing or viewing Australian and international news content.”

That quickly earned it another rebuke from Prime Minister Scott Morrison. “Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing,” Morrison said in a Facebook posting. “These actions will only confirm the concerns that an increasing number of countries are expressing about the behavior of BigTech companies who think they are bigger than governments and that the rules should not apply to them.”

– More to follow.

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