The market dominance of tech firms over local media organizations has been an ongoing concern for a long time. In the case of Australia, tech firms such as Google is the most prominently searched engine in the country, having little to no competition. Thereby, an inquiry was launched by the Australian Competition and Consumer Commission (ACCC) to evaluate the impact of Google and Facebook’s use on local advertising and media agencies.
The result was a market imbalance, where these giant tech firms had most of the market share. The inquiry committee recommended some restrictions on tech firms to protect and boost local agencies. These were launched by the government in t
he form of a draft code, which enables news companies to negotiate with tech firms for the content that appears in the search engines and news feeds. This code is strictly focused on “Google” and “Facebook”
In the case of non-compliance, penalties are estimated to be worth $10m per breach. This law has resulted in a backlash from these giant tech companies, where Facebook has announced blocking Australian users from viewing or sharing news, imposing the ban in immediate effect. On Thursday, Feb 18th, Facebook removed all local and global news sites in Australia. They also removed emergency health pages for Australians, but this was later claimed to be a mistake and was reverted back. Facebook has also restricted everyone outside Australia’s access to local sites of the country.
On the other hand, Google threatened to remove its search engines from Australia in opposition to the law. But later on agreed to pay Australian news agencies, such as News Corp in exchange for its stories. Both the companies have also agreed on a three-year plan where they would collaborate on a subscription platform, sharing the generated advertising revenue. Google has also signed deals with other media firms in Australia.
There is speculation that the decision by the Australian government can set a global precedent, as the law aims to address the bargaining power imbalance that exists between news agencies and tech platforms. There have been similar but less strict laws passed in the EU and France, also aimed to address the ever-growing power imbalances in the industry.
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