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Summary
- Australia mulls law that will require tech and social media companies to pay for news content.
- Facebook threatens to blackout Australian news from its sites around the globe.
- Google’s Australia plan is unclear for the moment but agrees to pay US media giant News Corp.
News organizations and tech and social media companies have shared a symbiotic relationship until now, but that may change if Australia has its way. Canberra is planning to bring a law that will require Facebook and Google to pay news organizations for using their content on the sites.
As per the proposal, the news organizations and the two companies would negotiate a mutually acceptable deal, and if that fails, they will have to accept binding arbitration.
Talks between them and the Australian government have not yielded any resolution so far.
Facebook is already raising the pitch against such a move, threatening this week to blackout all news content from the country on its site.
Google, on the other hand, is also holding separate talks with Canberra but without much progress.
News organizations from around the world have been using their platforms to push out content in the hope that it would help expand their paid subscribers at some point.
Conversely, social media organizations use the content to provide a one-stop-shop for news on their platforms, thereby expanding their user-base and acceptance.
Pic Credit: Pixabay.
What Are the Ramifications?
The Australian move to legislate the content-sharing proposal between news producers and users has huge ramifications for these companies as similar legislation may follow suit in other countries.
Although it may seem a genuine attempt to back the media industry already struggling to get a grip in a rapidly changing business environment, the task is easier said than done.
While the profits of most media organizations dipped, the income of tech and social media companies accelerated at a spectacular pace, even surpassing the GDPs of several smaller countries.
The Threat From Facebook
Facebook has threatened to restrict the sharing of news articles from Australia on its platform. But the company is hoping that the government would eventually back off from the proposal.
It claims that the Australian media organizations may lose as much as US$300 million from a Facebook content ban, a demoralizing prospect that would deter them from taking such a stand.
But will that affect Facebook? Not much, says the company. It claims that less than 4 percent of users check out their News Feed, which in essence means it will not affect the revenue streams from ads.
Pic Credit: Pixabay.
Google And News Corp Deal
Although Google’s plan concerning the Australian market was not immediately clear, it has signed a content-sharing agreement with media giant News Corp, which owns the Wall Street Journal.
News Corp said on Wednesday that it had signed a partnership agreement with Google to provide paid content to the search engine giant over the next several years.
Google had said earlier that it might close its search engine in Australia, but it is unclear it is still mulling such as step.
Some governments in the past had contemplated charging tech companies for content but without success. But the latest attempt by Australia would be of huge significance if it succeeds.
Microsoft Corp had also recently supported the idea and hoped the US would take the lead. It urged the government to consider supporting the Australian proposal to help the free press.