Australia’s standoff against Google and Facebook worked—sort of

Australia's communications minister has the air of a man in the middle of a victory speech. He credits his team and the country's competition regulator for succeeding where others had failed: forcing tech giants to pay for news. Josh Frydenberg persevered. In 2020, when the Australian government asked the competition regulator to develop a law that would force tech giants to pay for the news that appears on their feeds, Fletcher was aware of the stories others used as warnings. When Germany's biggest news publisher tried to stop Google from running snippets of its articles, it backtracked after just two weeks. When Spain tried to force Google to pay for news, the search giant just left blocking the news in the country for seven years.

Australia was threatened with even more drastic action. In January 2021, the tech giant suggested Australians could lose access to its entire search engine if the news media bargaining code came into force. Facebook argued that news makes up less than 4% of the content people see in their news feed. On February 17, Australians woke up to discover that all news links had been wiped off the platform, leaving the Facebook pages of the country's biggest media companies completely blank. The government said it was worried about traffic to news websites. Frydenberg said at the time that Facebook's actions confirm for all Australians the immense market power of these media digital giants.

Still, the government did not back down. According to Fletcher, the code was Australia’s answer to a problem that was first and foremost about competition. The argument was simple—Australia’s news industry should be compensated for helping Google and Facebook attract eyeballs. “What we're trying to do is replicate the ordinary commercial dealings that would occur in a market where there wasn't a huge imbalance of bargaining power,” he says. Advertisement

Others think the code was an attempt to subsidize the media industry, which was suffering from online competition for advertising. According to Australia's competition watchdog, out of every 100 Australian dollars spent on advertising, $38 went to Google, $28 to Facebook, and $19 to media outlets. If this was the reason for the code, it was a mistake.

Australians were able to experience this standoff through their Facebook feeds. The site had no news for eight days. News content began to reappear at 1 am on February 26, 2021. Tech's relationship with the media had changed permanently.

They paid up, striking deals with news organizations to pay for the content they display on their sites for the first time. On March 2, 2021, the code was approved, and it states that tech platforms had to negotiate a price with news publishers for their content. An arbiter would step in if they didn't pay and set a price. One year after the media code was introduced, there are 19 content deals with news organizations and 11 with Facebook.

Australia's code is being looked at by countries around the world as a way to stop the spread of news deserts. Canada is expected to make a proposal in March. Both the US and New Zealand have media associations. The UK culture secretary, Nadine Dorries, is said to be planning to require platforms to strike cash-for-content deals.