A few months ago, the government of Australia passed a new law that will force tech companies to pay publishers for news content. This decision will have implications on the tech industries as it will set the stage for similar actions in other countries.
The country’s unprecedented new law had been hotly debated in recent months. Facebook (FB) and Google (GOOGL) had opposed the initial version of the legislation, which would have allowed media outlets to bargain either individually or collectively with them — and to enter binding arbitration if the parties couldn’t reach an agreement.
After several rounds of talks and stand-offs with Facebook and google the Australian Parliament approved the new code on Thursday. Australian Treasurer Josh Frydenberg said in a statement- “The new code will ensure that news media businesses are fairly remunerated for the content they generate.”
As part of the recent stand-off last week Facebook even shut down news pages in Australia in opposition to the legislation. But it said earlier this week that it would restore them after the country made some changes to the code, including a provision that “must take into account whether a digital platform has made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements with news media businesses.”
According to Reuters, the Australian government has added four amendments to the proposed code.
These include a two-month mediation period, which will give two sides more time to “negotiate commercial deals,” before going into arbitration. Arbitration, meanwhile, will now only be used as a “last resort” following a period of “good faith” mediation.
Earlier, the code called for mandatory arbitration with a government-appointed arbitrator, if news publishers and tech giants were unable to come to a fair deal for displaying news content. Both Google and Facebook were unhappy about this forced arbitration clause.
Facebook said after those revisions were made that the new agreement would allow it to “support the publishers we choose to.” It later revealed a deal with major Australian news company Seven West Media, with plans to sign more with other publishers.
Google, meanwhile, had already been trying to get ahead of the new legislation by announcing partnerships with media organizations in Australia, including Seven and Rupert Murdoch’s News Corp (NWS).
The Australian government said that the code will be reviewed by the Treasury department after a year to “ensure it is delivering outcomes that are consistent with the Government’s policy intent.”
While Facebook has found a workaround to its problems in Australia, it’s still forcefully defending its opposition to similar far-reaching measures.
The showdown is set to continue. Similar case studies may soon emerge in other countries, with the United States and European Union facing growing pressure to adopt such measures. Canada’s government has also said that it plans to introduce legislation in the coming months.