In an attempt to safeguard the dwindling local news and media agencies, Australia has drafted a new Law that shall mandate tech giants like Google and Facebook to negotiate for payments with local publishers and broadcasters for content. If they can’t strike a deal, a government-appointed arbitrator will decide the price.
The threat is Google’s most potent yet as the digital giant tries to stem a flow of regulatory action worldwide. At least 94% of online searches in Australia go through the Alphabet Inc. unit, according to the local competition regulator.
Facebook Inc., the only other company targeted by the legislation, also opposes the law. The social media platform reiterated at Friday’s hearing it’s considering blocking Australians from sharing news on Facebook if the law is pushed through.
The proposed law, intended to compensate publishers for the value their stories generate for the company, is “unworkable,” Mel Silva, managing director for Australia and New Zealand, told a parliamentary hearing Friday. She specifically opposed the requirement that Google pay media companies for displaying snippets of articles in search results.
The legislation is designed to support a local media industry, including Rupert Murdoch’s News Corp., that has struggled to adapt to the digital economy. Google’s tougher stance drew rebukes from lawmakers at the hearing. Senator Andrew Bragg accused the tech giant of trying to “blackmail” Australians and policymakers.
Australia announced the legislation last month after an investigation found Alphabet Inc-owned Google and social media giant Facebook held too much market power in the media industry, a situation it said posed a potential threat to a well-functioning democracy.
The United States government this week asked Australia to scrap the proposed laws, which have broad political support, and suggested Australia should pursue a voluntary code instead.
Google threatened to disable its search engine in Australia if it’s forced to pay local publishers for news, a dramatic escalation of a months-long standoff with the government.
“We don’t respond to threats,” Australia Prime Minister Scott Morrison said Friday. “Australia makes our rules for things you can do in Australia. That’s done in our parliament. It’s done by our government. And that’s how things work here in Australia.”