Australia locked in plans on Tuesday to make Facebook Inc and Google pay its media outlets for news content, a world-first move aimed at protecting independent journalism that has drawn strong opposition from the internet giants.
Under laws to be introduced to parliament on Wednesday, Treasurer Josh Frydenberg said the Big Tech firms will have to negotiate how much they pay local publishers and broadcasters for content that appears on their platforms.
If they can't strike a deal, a government-appointed arbitrator will decide how much they will need to pay.
“This is a huge reform, this is a world first, and the world is watching what happens here in Australia,” Frydenberg told reporters in the capital Canberra.
“Our legislation will help ensure that the rules of the digital world mirror the rules of the physical world ... and ultimately sustain our media landscape here in Australia.”
The law amounts to the strongest check of the tech giants' market power globally, and follows three years of inquiry and consultation, ultimately spilling into a public dispute in August when the U.S. companies warned it may it may stop them offering their services in Australia.
Asked about earlier Facebook threats to block news content from its Australian website and Google's threat to block its main search engine in Australia, Frydenberg said “it's a mandatory code” and the companies would be “required by law ... to abide by it”.
In changes to draft legislation announced earlier this year that might benefit the tech companies, the final version of the law would not affect news content distributed on Facebook's Instagram subsidiary or Google's YouTube.
But Frydenberg added to the list of media companies with whom the tech giants must negotiate, saying public broadcaster the Australian Broadcasting Corp and specialist public broadcaster SBS would be included, along with dominant private sector outlets like News Corp and Nine Entertainment Co Holdings Ltd.
Representatives of Google and Facebook were not immediately available for comment on Tuesday.