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Google, Facebook negotiating deals to compensate Aussie media
Australian Treasurer Josh Frydenberg. File photo: Reuters.

(ATF) Google and Facebook are “very close” to multi-million-dollar deals with major Australian media outlets to pay for news, the country’s Treasurer has said.

The tech giants – under pressure both at home and abroad to share some of the billions in advertising revenue they have grabbed from news outlets around the world – have reportedly scrambled to avoid landmark regulation introduced by the Morrison government.

National Treasurer Josh Frydenberg said talks with Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai had made “great progress” in resolving a standoff, which is being closely watched around the world.

Australia is poised to adopt a new law that would force digital companies to pay for news content, which would create a global precedent.

Facebook and Google claimed the legislation would wreck the way the internet works and threatened to partially withdraw services from the country if the law was passed.

However, the government stood firm with Prime Minister Scott Morrison saying people may have to use Microsoft’s Bing search engine if Google followed through on its threat to withdraw its popular search engine DownUnder.

The tech giants are also facing pressure in Europe and at home to pay a greater proportion of tax given the windfall both have enjoyed during the pandemic and recent years.

On Monday, the disagreement in Australia appeared to ease. Frydenberg told the public broadcaster ABC that talks with the companies “made great progress over the course of the weekend”.

“I think we’re very close to some very significant commercial deals,” he said, “and in doing so that will transform the domestic media landscape.”

The agreements could be enough to see Facebook and Google avoid parts of the legislation they appeared to oppose the most, such as binding arbitration hearings to ensure they are not using their online advertising duopoly to dictate terms in deals with media companies.

Deal with SevenWest ‘worth US$23 million’

Later, SevenWest Media, owner of Channel 7 TV network and The West Australian newspaper, announced an agreement for its content to be hosted on Google’s News Showcase product.

The Sydney Morning Herald reported the first major deal with a large Australian news organisation was worth more than Aus$30 million (US$23 million) a year.

SevenWest chairman Kerry Stokes said it was a “great outcome” and hailed the government’s work on its news media bargaining code as “instrumental in the outcome of this ground-breaking agreement”.

The firm will join several smaller local publishers on News Showcase, which Google said had received more than one million views since launching in Australia eight days ago.

Frydenberg’s comments suggest major Australian media organisations, such as Rupert Murdoch’s News Corp and Nine Entertainment, could be close to reaching similar deals.

A Google spokesman said the company was in discussions with publishers both “large and small”, while a Facebook spokesperson said it had been negotiating to “land commercial deals that reflect the commercial value of news content on our platform”.

Legislation deemed ‘essential’

Peter Lewis, director of the Centre for Responsible Technology at the Australia Institute think tank, said the platforms’ current willingness to negotiate showed regulation was “essential”. 

“Any deals that Google and Facebook do will only occur because of the prospect of the bargaining code – so it is already doing its job,” he told AFP.

Frydenberg hinted to local media that amendments could be made to the code before it is presented to parliament on Wednesday, but his office declined to give details.

Lewis said the treasurer’s discretion on what to include in the code, such as stating which tech firms are covered, was “a critical leverage point for the government”.

News groups worldwide have seen their businesses ravaged by the loss of tens of billions in advertising dollars that once flowed to their newspapers but are now overwhelmingly captured by the big digital platforms.

Thousands of journalists’ jobs have been lost and numerous outlets forced to close in Australia alone over the past decade.

With reporting by AFP

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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