Australia has passed a world-first law aimed at making Google and Facebook pay for news content on their platforms.
The legislation had been fiercely opposed by the U.S. tech giants, with Facebook blocking all news content for Australians because of the dispute.
Facebook agreed to reverse its decision after robust negotiations with the government, resulting in changes to the law to address some of their concerns.
The law is seen as a test case for similar regulations around the world.
The amended law – the News Media Bargaining Code – was passed by the Australian House of Representatives on Thursday after previously passing through the Senate.
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Facebook and Google had previously argued that the law “fundamentally” misunderstands how the Internet works.
What does that mean?
The news code encourages tech giants and news organizations to negotiate payment deals with each other, and requires Facebook and Google to invest tens of millions of dollars in local digital content.
If negotiations fail, an independent arbitrator can set the price they pay to local media – something analysts say benefits news corporations.
The government argues that this dictates a “fairer” negotiation process between the parties, as it gives news organizations more leverage.
The Australian Competition and Consumer Commission (ACCC) – a market regulator – says publishers have had little bargaining power because they are so dependent on tech monopolies like Google and Facebook.
It follows a Commission investigation into the online advertising dominance of tech firms, which showed that in 2018, for every A$100 (£56; €65) spent by Australian advertisers, A$49 went to Google and A$24 to Facebook.
The code also forces tech platforms to notify news publishers of changes to their algorithms that decide which stories are displayed.
The amended law also now requires the government to consider a platform’s existing contributions to journalism – such as commercial deals with publishers – before applying the code to them.
That means Facebook and Google could escape the arbitration process entirely.
In addition, the government must give a platform one month’s notice if it is considering applying the code.
What do Google and Facebook have to say about this?
The tech companies argue that they already help news publishers by driving traffic from their platforms back to news sites.
Facebook and Google are simply helping people find news content in the first place, the platforms say.
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Both tech companies lobbied the Australian government to change the law, while also seeking contracts with local news organizations.
Google had threatened to withdraw its primary search engine from Australia, but the company recently agreed deals with local media companies, including Nine Entertainment and Seven West Media, worth a total estimated A$60 million ($47 million; £34 million).
It has also signed a deal for an undisclosed sum with Rupert Murdoch’s News Corporation.
In a statement on Tuesday, Facebook promised to reverse its ban on news content, however Australian news sites remain unavailable. Australian Finance Minister Josh Frydenberg said the ban would be lifted Friday.
Facebook has since signed at least one deal – with Seven West Media – and is in talks with other Australian news groups.
Both companies have also pledged to invest $1 billion each in the news industry globally over the next three years.