Australia will force U.S. tech giants Facebook Inc (FB.O) and Alphabet Inc’s (GOOGL.O) Google to pay Australian media outlets for news content in a landmark move to protect independent journalism that will be watched around the world.
Australia will become the first country to require Facebook and Google to pay for news content provided by media companies under a royalty-style system that will become law this year, Treasurer Josh 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,” Frydenberg told reporters in Melbourne.
“Nothing less than the future of the Australian media landscape is at stake.”
The move comes as the tech giants fend off calls around the world for greater regulation, and a day after Google and Facebook took a battering for alleged abuse of market power from U.S. lawmakers in a congressional hearing.
Following an inquiry into the state of the media market and the power of the U.S. platforms, the Australian government late last year told Facebook and Google to negotiate a voluntary deal with media companies to use their content.
Those talks went nowhere and Canberra now says if an agreement cannot reached through arbitration within 45 days the Australian Communications and Media Authority would set legally binding terms on behalf of the government.
Google said the regulation ignores “billions of clicks” that it sends to Australian news publishers each 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.”
Facebook did not immediately respond to a request for comment.