Australia’s media bill could become law ‘fairly soon’ despite Google and Facebook objections, minister says

Australia is on track to the push through the legislation that would require digital platforms to pay for news, according to the country’s communications minister.

The government expects the likes of Google and Facebook to comply with the law, Paul Fletcher told CNBC’s “Street Signs Asia” on Tuesday.

“This bill will pass into law fairly soon,” Fletcher said. “The democratically elected government of Australia expects that businesses that are doing business in Australia will comply with our laws.”

The media bill was introduced in parliament last December. Referred to as the “news media bargaining code,” it would require digital platforms to pay local media outlets and publishers to link their content in news feeds or search results. If both sides are unable to reach a commercial deal, government-appointed arbitrators can decide on the price.

Fletcher was part of an Australian delegation that held a conversation with Google CEO Sundar Pichai to discuss the contentious bill and its implications. Prime Minister Scott Morrison and Treasurer Josh Frydenberg were also at that meeting.

He explained that while it was made clear to Google that the Australian government does not want to see the search engine or Facebook leave the market, they are still expected to comply with the law of the land.

“We have seen from time to time over the last few years, big tech companies — typically U.S. tech companies — make threats about leaving Australia if they weren’t happy with our regulatory settings,” he said, drawing comparisons with Amazon a few years back.

The e-commerce giant temporarily barred Australians from access to products from its main website in 2018 to comply with changes in local tax laws, but later walked back on that decision, according to media reports.

The media bargaining code is undergoing a senate enquiry at the moment.

Google argues that the current version of the proposed legislation does not work for its products and services in Australia, but says it’s willing to pay publishers for value.

Australia’s competition watchdog said in September that for every 100 Australian dollars ($77.26) spent by advertisers online in 2019, Google took A$53, Facebook got A$28 and just A$19 went to other websites and advertising tech.

Fletcher said there are concerns Google has a near-monopoly status in the search market, and that the government’s main reason for the law is that it wants Google and Facebook to do “satisfactory commercial agreements” with Australian news media businesses.

“When you have that extraordinary degree of market power, then perhaps you don’t feel under the same ordinary commercial pressure to do deals with other market participants,” Fletcher said. “That’s why we’re coming in with this backstop of this legislative process where if a commercial deal is not done, then there is the power for this compulsory arbitration process to occur.”

Analysts say the law in Australia could set the precedence for regulators in other countries in dealing with Big Tech.

If Google decides to withdraw its product from Australia, it could allow other search engines, including DuckDuckGo and Microsoft’s Bing, to expand their market share. That’s the argument from both the government and the competition watch dog.

“We’d expect that the market would respond and other providers of search services would come into the market, and of course, very quickly, we’d expect their search offerings to adapt to the greater demand,” Fletcher said.

The communications minister also said he’s been using the DuckDuckGo search engine on mobile for about six months. “I found it to be perfectly fine,” he said.