Last month, the Australian government announced a legislation, a new code, after an investigation that showed the massive impact of the tech giant’s marketing power in the media industry, a situation that were likely to pose a threat to Australia’s democracy. Following this new code, Google and Facebook will be subject to obligatory price arbitration if an agreement on payment for Australian media can not be negotiated. If any digital platforms do not abide by the new code, there will be a fine up to AUS$10million (US$7.7million).
Australia has competition regulator has warned that this new code to force Google and Facebook to pay for media content were just the beginning of the more regulation and laws for digital platforms.
“This bargaining code is a journey, if we see market power elsewhere, we can add them to the code,” Australian Competition and Consumer Commission Chairman (ACCC) Rod Sims said in an interview for Reuters Next.
A “two-way value exchange” is to be used by an arbitrator to make an unbreakable decision. It requires Facebook and Google to consider the values and benefits they receive from using the Australian media content, and for Australia’s local media companies to consider the value and benefits they receive from Facebook and Google users viewing their content.
On respond to this new legislation, Google announced on Friday of January 22nd that it would block its search engine in Australia if the government proceeds with the new code that would force Google and Facebook to pay local media companies in order to use their contents. 19 million Australian users would face degenerated search and Youtube experiences if the new code was implemented, Google said.
Meanwhile, Australia is on the course to pass laws to carry out the new code that would make tech giants negotiate payments with local media companies for the content which is to be included in search results and news feeds.
“The code’s arbitration model with bias criteria presents unmanageable financial and operational risk for Google,” Mel Silva, managing director for Australia and New Zealand, told a senate committee.
“If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia.”
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