The federal government is hoping to make tech giants such as Facebook and Google pay for Australian content if it is a source of profit.
The Australian Competition and Consumer Commission (ACCC) has been directed to develop a mandatory code of conduct to address bargaining power imbalances between digital platforms and media companies.
The move forms part of the government's response to the ACCC's Digital Platforms Inquiry, which in July made a total of 23 recommendations that covered competition, consumer protection, privacy, and media regulatory reform.
"In its final report, the ACCC identified that Facebook and Google have each become unavoidable trading partners for Australian news media businesses in reaching audiences online, resulting in an imbalance in bargaining power," a joint statement from Treasurer Josh Frydenberg and Minister for Communications, Cyber Safety and the Arts Paul Fletcher said.
The ACCC was directed by the government in December to facilitate the development of voluntary codes to address bargaining power imbalances between digital platforms and news media businesses.
The government indicated at the time that if an agreement was not forthcoming, it would look to "alternative options to address concerns raised, which may include the creation of a mandatory code".
According to Frydenberg, the preparation of a draft is the result of an agreement yet to be reached between the ACCC and tech giants.
"The ACCC was tasked to engage in discussions, with the media industry, with a voluntary code of conduct," he said, speaking on Sky News. "The progress on that voluntary code of conduct has been very limited, so the government has taken the decision to set in place a mandatory code of conduct, which will be prepared by the ACCC."
The ACCC currently plans to have the draft code of conduct released by the end of July and then bringing it into force "thereafter".
Frydenberg said enforcing a mandatory set of rules was essentially due to digital firms "not playing ball".
"It was going to be very difficult to reach agreement between the parties to ensure that the traditional media businesses that prepare the content, that they get rightly and fairly paid for it," he said.
"This is really a question of fairness.
"If you prepare the content and the digital platforms are using it to bring traffic to their websites, then they should pay for it."
The government said it has decided that the original timeframe set out in its response requires acceleration, saying the Australian media sector was already under significant pressure, adding that this had "now been exacerbated by a sharp decline in advertising revenue driven by coronavirus".
"The ACCC considers it is unlikely that any voluntary agreement would be reached with respect to the key issue of payment for content," the joint statement continued.
The code is expected to cover the sharing of data, ranking, and display of news content, along with the monetisation and sharing of revenue generated from news. It will also establish appropriate enforcement, penalty, and binding dispute resolution mechanisms.
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