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Australia Passes Law Requiring Google, Facebook To Pay For News

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The Australian government has passed the newly amended Media Bargaining Code in the parliament which requires technology giants Facebook and Google to pay for local Australian news content that is shared on their platforms.

Nick Clegg, Facebook VP of Global Affairs, wrote in a blog post that under the previous draft of the law, Facebook would have had two options - to provide open ended subsidies to multi-national media conglomerates or remove news from its platform in Australia.

The social media giant went ahead and blocked publishers and people in Australia from sharing or viewing Australian and international news content last week following a last minute standoff between Facebook and the Australian government.

Five days later, Facebook said it would restore news on its platform for Australians in the coming days after reaching an agreement with the Australian government on their proposed new Media Bargaining Code.

The Australian government agreed to a number of changes and guarantees that address its core concerns about allowing commercial deals with publishers. Facebook also agreed to invest at least $1 billion to support the news industry over the next three days. It has already invested $600 million since 2018.

Under the original proposed law, "Facebook would have been forced to pay potentially unlimited amounts of money to multi-national media conglomerates under an arbitration system that deliberately misdescribes the relationship between publishers and Facebook," Clegg wrote.

Following further recent discussions, Clegg noted that the Australian government agreed to changes that encouraged fair negotiations without the looming threat of heavy-handed and unpredictable arbitration.

Facebook said it might have been forced into this position six months ago and have been in discussions with the Australian government for three years trying to explain why this proposed law, unamended, was unworkable.

Tim Berners-Lee, the inventor of the World Wide Web, warned that the Australian law could make the internet as we know it "unworkable," arguing that it "risks breaching a fundamental principle of the web by requiring payment for linking between certain content online."

Based on the amended law passed today, Facebook is looking to strike deals with local publishers to enable Australians to share news links once again. It is reportedly in talks with Nine Entertainment, the Australian Broadcasting Corp. and Seven West Media.

This should be in line with deals announced last month between Facebook and The Guardian, Telegraph Media Group, Financial Times, Daily Mail Group, Sky News and many more, including local, regional and lifestyle publishers, to pay for content in its Facebook News product in the UK.

Facebook has struck similar deals with publishers in the US, and it is in active negotiations with others in Germany and France.

Australia will now become the first country where a government arbitrator will decide the price to be paid by these technology giants if commercial negotiations with local news outlets fail.

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