The Australian competition watchdog warned that the planned laws make the country the first law in the world to force Google and Facebook to pay for news content and may just be the beginning of more regulation of digital platforms.

The Australian government announced legislation last month after conducting an investigation that showed that technology giants have excessive market power in the media industry, a situation that poses a potential threat to functioning democracies.

According to the code, if a commercial agreement on Australian media payments cannot be reached, Google and Facebook will be subject to mandatory price arbitration.

The Chairman of the Australian Competition and Consumer Commission (ACCC) Rod Sims said in an interview with Reuters Next: “This bargaining rule is a journey. If we see market power elsewhere, we can Add it to the code.”

If the digital platform does not comply with the decision, it will face a fine of up to 10 million Australian dollars (about 560 million rupees).

The core of the planned Australian regulations is the “two-way exchange of value” that arbitrators use to make binding decisions. This requires Facebook and Google to consider the value gained from using Australian media content. It also requires local media companies to consider the value they get from Facebook and Google users who view its content.

Some Australian media organizations are dissatisfied with both aspects of the Code. Critics pointed out that other participants, such as Facebook’s Instagram and Google’s Youtube, are not included in the regulations.

At the same time, Google announced that the code was not feasible, and in particular required a two-week notice to publishers to inform them of certain changes in algorithms and internal practices.

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Sims said that regulations are the best way to ensure fair competition, and pointed out that global competition laws have failed to prevent Facebook and Google from gaining important market power.

Sims said in an interview on December 21: “Let’s take a look at its development; there is no need to optimize immediately.”

Australian law has broad political support and is expected to be voted on in Parliament early this year. The law was developed based on a survey conducted by the ACCC, which found that for every 100 Australian dollars (approximately 5,600 rupees) of online advertising spending, $53 was spent on Google (approximately 3,800 rupees) and that Facebook was charged $28 (approximately). 2,000 rupees), charged 19 Australian dollars (about 1,100 rupees) from other media companies.

ACCC pays more and more attention to the rapidly growing market power of Google and Facebook. It has two queries on advertising technology and mobile app stores, and reports were released in January and March.

Sims expressed concern about the excessive pricing and self-preference of the app store. He said that the report will show the state of the market and added that regulators will continue to focus on data issues in 2021.

Sims said: “I hope that not only Australia but also overseas companies will benefit from our findings.”

© Thomson Reuters 2020


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