Two days after Google and Facebook CEOs testified before Congress over alleged antitrust violations, Australia has proposed regulation that could force the tech giants to pay Australian news outlets to distribute their content.
The landmark regulatory proposal announced Friday (July 31) by the Australian Competition & Consumer Commission (ACCC), the country’s competition regulator, would fix what it calls “acute bargaining power imbalances” between news groups and Google and Facebook.
“There is a fundamental bargaining power imbalance between news media businesses and the major digital platforms, partly because news businesses have no option but to deal with the platforms, and have had little ability to negotiate over payment for their content or other issues,” said ACCC Chairman Rod Sims in a statement. “We wanted a model that would address this bargaining power imbalance and result in fair payment for content, which avoided unproductive and drawn-out negotiations, and wouldn’t reduce the availability of Australian news on Google and Facebook.”
Under the proposed new rule, if the publishers and digital platforms can’t agree to a deal after 90 days of negotiations a final offer arbitration process will be initiated with selection of the “most reasonable” offer in 45 business days.
In response, Google said it was disappointed by the proposal.
“The code discounts the already significant value Google provides to news publishers across the board, including sending billions of clicks to Australian news publishers for free every year worth $218 million,” said Mel Silva, managing director of Google Australia and New Zealand, in a statement. “It sends a concerning message to businesses and investors that the Australian government will intervene instead of letting the market work, and undermines Australia’s ambition to become a leading digital economy by 2030.”
The initiative is expected to be debated in Parliament and if enacted, would allow Australian news publishers outlets to be paid within months.
Proposed rule changes follow charges by the ACCC that Google failed to get consent or inform consumers before combining personal information in Google accounts with browsing activities on non-Google websites.
The action, which allegedly took place four years ago, allowed Google to link the browsing behavior of millions of consumers with their names and identities, providing it with “extreme” market power, the regulator said.
Google has denied the charges.
On Wednesday (July 30), before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law, Facebook CEO Mark Zuckerberg said the company’s acquisition of Instagram was not an attempt at removing a potential competitor from the marketplace.
On Google’s purchase of ad tech platform DoubleClick and its decision to merge DoubleClick’s data with user account data, CEO Sundar Pichai said Google had promised regulators the deal would not reduce user privacy.