One of the first countries that is making it mandatory for digital platforms to pay for content they use is Australia. The Treasury department of the country said that two United States based digital giants Facebook Inc and Alphabet Inc's Google will be forced to share their advertising revenues with local media firms.
This measure was announced by the country after failed negotiations between the government and Facebook and Alphabet where the parties had attempted to develop a voluntary code of conduct that could address the concerns of the domestic Australian media players the hold of the two companies on advertising, the main source of revenues for the domestic companies, in the country was too tight, said Australia’s Treasurer Josh Frydenberg.
“We understand the challenge that we face, this is a big mountain to climb,” Frydenberg told reporters in Canberra. ”These are big companies that we are dealing with but there is also so much at stake, so we're prepared for this fight.”
After the failed talks on content payment rules, the Australian Competition and Consumer Commission (ACCC), the competition watchdog of the country, was asked by the government to develop a mandatory code of conduct for revenue sharing and other issues between the various domestic conventional media outlets and digital platforms.
Its initial plans of formulating a voluntary code by November have been scrapped by the government. It has instead now directed the ACC to create and submit a draft mandatory code by July which is planned to be transformed into legislation soon after, the treasurer said.
Sharing of data, ranking and display of news content, in addition to the sharing of revenue generated from news, will be included in the mandatory code, Frydenberg said. He added that binding dispute resolution mechanisms and penalties on violation of the code will also be established through eth code,
The total worth of the online advertising market of Australia is about A$9 billion ($5.72 billion) annually and has seen an eight fold growth in its value since 2005.
According to an ACCC report on digital platforms published in June last year, about a third of every A$100 that is spent on online advertising, barring classifieds, in Australia, flows into the kitty of Google and Facebook.
Facebook and Google needed to come to an agreement on the rules and codes so that the companies are not able to abuse and exploit their dominant market position and power and damage competition, the Australian government had said last December. But if no agreement was achieved, new controls would be imposed by the government, it had also warned.
Facebook was reportedly dismayed by the new government move that was announced on Monday. “We're disappointed by the government's announcement, especially as we've worked hard to meet their agreed deadline,” Facebook said. “We've invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry,” Facebook Australia and New Zealand Managing Director Will Easton said in an emailed statement.
However Google said that it would extend cooperation to the government about the plans of the new code of conduct. “We have sought to work constructively with industry, the ACCC and government to develop a code of conduct, and we will continue to do so in the revised process set out by the Government today,” a Google spokesperson said.
(Source:www.thehindubuisinessline.com)
This measure was announced by the country after failed negotiations between the government and Facebook and Alphabet where the parties had attempted to develop a voluntary code of conduct that could address the concerns of the domestic Australian media players the hold of the two companies on advertising, the main source of revenues for the domestic companies, in the country was too tight, said Australia’s Treasurer Josh Frydenberg.
“We understand the challenge that we face, this is a big mountain to climb,” Frydenberg told reporters in Canberra. ”These are big companies that we are dealing with but there is also so much at stake, so we're prepared for this fight.”
After the failed talks on content payment rules, the Australian Competition and Consumer Commission (ACCC), the competition watchdog of the country, was asked by the government to develop a mandatory code of conduct for revenue sharing and other issues between the various domestic conventional media outlets and digital platforms.
Its initial plans of formulating a voluntary code by November have been scrapped by the government. It has instead now directed the ACC to create and submit a draft mandatory code by July which is planned to be transformed into legislation soon after, the treasurer said.
Sharing of data, ranking and display of news content, in addition to the sharing of revenue generated from news, will be included in the mandatory code, Frydenberg said. He added that binding dispute resolution mechanisms and penalties on violation of the code will also be established through eth code,
The total worth of the online advertising market of Australia is about A$9 billion ($5.72 billion) annually and has seen an eight fold growth in its value since 2005.
According to an ACCC report on digital platforms published in June last year, about a third of every A$100 that is spent on online advertising, barring classifieds, in Australia, flows into the kitty of Google and Facebook.
Facebook and Google needed to come to an agreement on the rules and codes so that the companies are not able to abuse and exploit their dominant market position and power and damage competition, the Australian government had said last December. But if no agreement was achieved, new controls would be imposed by the government, it had also warned.
Facebook was reportedly dismayed by the new government move that was announced on Monday. “We're disappointed by the government's announcement, especially as we've worked hard to meet their agreed deadline,” Facebook said. “We've invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry,” Facebook Australia and New Zealand Managing Director Will Easton said in an emailed statement.
However Google said that it would extend cooperation to the government about the plans of the new code of conduct. “We have sought to work constructively with industry, the ACCC and government to develop a code of conduct, and we will continue to do so in the revised process set out by the Government today,” a Google spokesperson said.
(Source:www.thehindubuisinessline.com)
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