Australia passes world-first new law forcing Facebook and Google to pay for news content

Treasurer Josh Frydenberg will oversee the news code now that it has passed into law. Photo / Getty Images

Australia has become one of the first countries in the world with the power to force tech giants to pay for the news they use after a controversial law passed in parliament today.

The News Media and Digital Platforms Mandatory Bargaining Code, created by Australia's competition watchdog, could be used to demand powerful US firms Google and Facebook pay Australian news outlets for using their content, achieving what other countries have tried and failed to do.

The news code's passing also ends a fierce, three-year battle with the tech giants, which has escalated in recent weeks.

Treasurer Josh Frydenberg this morning said the laws were "world-leading" and would have a positive impact on the Australian media landscape.

"This is a significant milestone," he said.

"This legislation will help level the playing field and see Australian news media businesses paid for generating original content."

But its path into law has been a bumpy one after Google first threatened to withdraw its search engine from Australia and launched a fierce public campaign against the news code, and Facebook last week banned all news and other information from being seen by its Australian users to evade the law's reach.

The multibillion-dollar social network this week agreed to lift its ban after winning amendments to the laws, although it was still yet to do so immediately after the law was passed.

Facebook global affairs vice-president Nick Clegg last night issued a blog post seeking to explain the company's extreme action, admitting it had "erred on the side of over-enforcement" by banning all news while arguing the laws had given it no other choice.

It's still unclear whether Frydenberg will "designate" Facebook or Google to fall under the laws, however, after both companies have begun striking last-minute deals with Australian news outlets to avoid it.

Swinburne University media senior lecturer Dr Belinda Barnet said the news code had already paid off for several publishers and TV networks, with companies including Seven West Media, Nine Entertainment, Junkee and News Corp (publisher of this website) signing deals with Google, and Facebook announcing a letter of intent for a deal with Seven.

"It will benefit Australian media organisations and it already has," she said.

"Hopefully the Treasurer will stand up for small and medium-sized outlets if they don't come out with deals."

If either company is named under the laws, it could trigger a negotiation and arbitration process with registered news outlets that would take as long as seven months.

The Australia Institute Centre for Responsible Technology director Peter Lewis said the Government should closely monitor what Facebook does next, including deals struck and offers made to smaller media outlets, to determine whether the companies should be named under the laws.

Australia's battle to regulate elements of the tech giants had also just begun with the news code, he said.

"It is also important to recognise this is just part of a series of digital platform reforms proposed by the (Australian Competition and Consumer Commission) relating to disinformation, consumer data, and the creepy ad tech industry," he said.