In order to display content, both Google and Facebook has been told they must share data and advertising revenue with local media companies.
This decision came after local media complained that Google and Facebook have a stronghold on advertising.
This is a contentious issue seeings how advertising revenue is the big source of income for media in Australia.
Treasurer Josh Frydenberg tells reporters they’re ready for a fight with the two tech giants due to the nature of what’s at stake.
“We understand the challenge that we face, this is a big mountain to climb.
These are big companies that we are dealing with but there is also so much at stake, so we’re prepared for this fight.”
Australia’s online advertising market is said to be worth about $9 billion AUD ($5.72 billion USD) annually. Since 2005, it has grown more than eight times.
For every $100 AUD spent on online advertising in Australia, nearly a third goes to Google and Facebook.
First, Facebook and Google were asked to provide a voluntary code of conduct for addressing the complaints by Australian media companies.
When a code of conduct wasn’t voluntarily provided, a mandatory code will be put in place by the Australian Competition and Consumer Commissions (ACCC).
ACCC has until July to submit the draft of the mandatory code of conduct. From there, it will be passed into legislation.
The mandatory will include not only sharing advertising revenue, but rules related to sharing data, and the ranking and display of news content.
The two companies will now share data and advertising revenue with local media companies in order to display their content.
This rule came during a time when coronavirus has caused a steep decline in ad spend.
For some newspapers in Australia, because of the lost revenue, they’ve had to stop printing altogether.
Even some of the largest media companies have had to ask staff to take a pay cut or just resign.
A mandatory code of conduct is unlikely to solve all of these problems, but it will help media companies recoup some of their lost revenue and level the playing field to an extent.