Facebook Inc (NASDAQ:FB) and Google, owned by parent Alphabet Inc (NASDAQ:GOOG), will be forced to share their advertising revenue with Australian media companies under a new mandatory code being drawn up by the country’s regulator.
The Australian Competition and Consumer Commission (ACCC) has been instructed by the federal government to develop the code, which will require the tech giants to pay news media organisations for the use of their content as well as advising them of any changes to search engine algorithms that could influence content rankings.
The rules were originally designed to be voluntary, however, following steep declines in advertising revenue during the coronavirus pandemic and limited progress in early negotiations between the news media and the tech platforms, the Australian government has asked the ACCC to make the code mandatory.
The mandatory rules will add penalties and dispute resolution mechanism for negotiations between news outlets and the online platforms.
The code will also contain definitions for what is considered news content under the code, which could potentially extend beyond Facebook and Google’s main sites and to other platforms such as Twitter and Instagram.
“What we want to see is a level playing field…for the companies and for the journalistic content that is prepared”, said Australian treasury minister Josh Frydenberg.
“By creating a mandatory code, we’re seeking to be the first country in the world that successfully requires these social media giants to pay for original news content”, he added.