Treasurer Josh Frydenberg has backed plans to make tech giants Facebook and Google pay media publishers for news, saying Australia will succeed where other countries failed.
Mr Frydenberg said a world-first mandatory code of conduct would ensure the tech giants were legally required to pay millions of dollars to Australian media organisations for their content via options such as a pay-per-click scheme or payments based on the cost of producing news.
The code ordered by the federal government will be in place as early as August.
Mr Frydenberg said the government intervened to take on some of the “most valuable and powerful companies in the world” after the competition watchdog indicated negotiations for a voluntary code had stalled.
“In France, the digital platforms said that they wouldn’t show domestic media unless it was for free,” he said.
“These are big companies that we are dealing with but there is also so much at stake, so we’re prepared for this fight. We believe this is a battle worth fighting. We believe this is critical for the future viability of our media sector. We won’t bow to their threats.”
Australian Competition and Consumer Commission (ACCC) chair Rod Sims said the mandatory code would end the “one-sided” business model that was putting the sustainability of news outlets at risk.
He said there were concerns that negotiations for a voluntary code were being “completely driven by Facebook and Google”, pointing out non-compulsory measures overseas had failed.
“A couple of countries overseas — particularly Spain and France — have passed various laws to get Google and Facebook to pay for content and Google and Facebook have basically said the amount we’re willing to pay is zero,” Mr Sims said.
Communications Minister Paul Fletcher said paying for content used to sell online ads would be part of the law for multinational companies operating in Australia.
“Over 19 million people use Google every month and 17 million Facebook,” he said.
“That is a lot of advertising revenue they are gathering in the Australian market and these will be legal requirements to operate in the Australian market.”
Facebook’s Australian managing director Will Easton said the company was “disappointed” with the announcement, as it had “worked hard to meet their agreed deadline” for voluntary rules.
It is understood the social media giant had written its own draft code and had been seeking feedback from publishers.
In a statement, Google said it had “worked for many years to be a collaborative partner to the news industry”, and promised to work constructively on the new mandatory code.
Labor also welcomed the mandatory code.