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Australia last month announced plans to force Google, Facebook, and other internet firms to share advertising revenues earned from news content featured by their search engines Photo: AFP/File
tech

Australian media group wants tech giants to pay $400 mil a year

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By David MILLIKIN

A leading publisher called Thursday for Google and other tech giants to pay Australian news outlets some U.S.$400 million a year under a mandatory code of conduct ordered by the government.

Australia last month announced plans to force Google, Facebook, and other internet firms to share advertising revenues earned from news content featured by their search engines.

In an initiative being closely watched across the world, the government is due to unveil in July details of the mandatory payments as part of a code of conduct for the tech giants' dealings with news media.

The chairman of Nine Entertainment, Australia's second-biggest media company, argued Thursday that the payment should amount to 10 percent of the tech companies' advertising revenue in Australia -- estimated by the government at some A$6 billion (U.S.$3.9 billion) per year.

Peter Costello said the Australian Competition and Consumer Commission (ACCC) had determined that 10 percent of the tech firms' revenues derived from advertising on news content.

"So, if you apply those figures, Google and Facebook are taking about $600 million of advertising revenue out... which otherwise could have, or should have, been going to media," he said in an interview with Nine's Australian Financial Review newspaper.

"They are essentially using the product which is created by news organizations without paying for it," he said. "In fact, using it to boost their own revenues and taking the advertising which otherwise would go to support that journalism."

The government said it was imposing the code of conduct after months of negotiations on a voluntary agreement with Google, Facebook and other companies failed to reach an agreement.

Google and Facebook protested the move and called for continued negotiations. Both companies also insist they have invested millions of dollars in initiatives in helping Australia's struggling news industry.

Costello dismissed the need for further talks, saying the best way to address the issue is "an industry solution, where you sit down and try to estimate the value that Google and Facebook are getting from the use of this material. We think it's $600 million a year".

"These are trillion-dollar corporates, it's not as if it's going to undermine their profitability if they had to pay $600 million in revenue for copyright in Australia -– and I hope they would see it that way," he said.

Google and Facebook have had a huge impact on Australia's news industry, capturing two-thirds of online advertising spending.

In response to falling revenues, Australian news outlets have slashed 20 percent of jobs in the last six years.

The crisis has only deepened in the economic and advertising downturn caused by the coronavirus pandemic, which has already forced the closure of many smaller news publishers.

If Australia is successful in its efforts to ensure more advertising revenue flows to publishers, it would be the first country to do so.

Australia's new regulations will also cover the sharing of data, and the ranking and display of news content, to be enforced by binding dispute resolution mechanisms and penalties.

An estimated 17 million Australians use Facebook each month and spend an average of 30 minutes on the platform a day, while 98 percent of Australian mobile searches use Google.

© 2020 AFP

©2020 GPlusMedia Inc.

4 Comments
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I totally agree with Australia!!! Good job!!! Google and Fakebook are exploiting the whole naive world!!!

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Viktor CernatinskijToday 02:42 pm JST

I totally agree with Australia!!! Good job!!! Google and Fakebook are exploiting the whole naive world!!!

You know they are kinda advertising the newspapers and so an for free there ... if they would just remove them the ravenue of these news pages would go down very much which is why most countries that had the same Idea came to the conclusion not to do it.

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You know they are kinda advertising the newspapers and so an for free there ... i

Not really. Google takes popular content and puts the basic information on its own pages, so they keep any ad revenue. Only if a person clicks through for more details do they move onto the media website. So most articles are browsed within Google, using content created by others.

Amazon has similarly predatory behavior. When they see a successful product, they do their own knock-off. The company that made the product successful on Amazon has provided Amazon with all they need to know - volume, customer list, pricing, etc. Virtually no risk for Amazon, and they easily trash a successful Amazon seller and put the profits in their own pocket.

These companies makes the railroad barons look like saints.

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All those companies are middle-men, sponging off the work of others, without asking. They are taking snippets from real news organizations, without compensation, hourly, daily, weekly, for years now, and generating revenue. "Fair Use" laws shouldn't be abused in the ways that the huge aggregators do it.

I'd love to be able to block all google stuff, but that is impossible. I have been able to block all facebook at the network layer, well, 95% of facebook.

Amazon is nearly impossible to block because some govt websites use EC2.

Whatever laws are enacted shouldn't be about specific companies. They need to have a test for how abusive a middle-man company is based on the frequency and number of copied snippets and definitely the total revenue for the company. These need to be relative to the companies having their content taken.

If a news article by a 4 person news company gets taken by google, then ends on the front page for 50M google users, certainly that tiny news company deserves compensation. Perhaps A$0.01 each time it shows up, regardless of clicks.

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