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Australian media wants tech giants to share revenue

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A leading publisher called Thursday for Google and other tech giants to pay Australian news outlets some US$400 million a year under a mandatory code of conduct ordered by the government.

Australia last month announced plans to force Google, Facebook and other internet firms to share advertising revenues earned from news content featured by their search engines.

In an initiative being closely watched across the world, the government is due to unveil in July details of the mandatory payments as part of a code of conduct for the tech giants’ dealings with news media.

The chairman of Nine Entertainment, Australia’s second-biggest media company, argued Thursday that the payment should amount to 10% of the tech companies’ advertising revenue in Australia – estimated by the government at some A$6.0 billion ($3.9 billion) per year.

Peter Costello said the Australian Competition and Consumer Commission (ACCC) had determined that 10% of the tech firms’ revenues derived from advertising on news content.

“So, if you apply those figures, Google and Facebook are taking about A$600 million of advertising revenue out … which otherwise could have, or should have, been going to media,” he said in an interview with Nine’s Australian Financial Review newspaper.

“They are essentially using the product which is created by news organizations without paying for it,” he said. “In fact, using it to boost their own revenues and taking the advertising which otherwise would go to support that journalism.”

The government said it was imposing the code of conduct after months of negotiations on a voluntary agreement with Google, Facebook and other companies failed to reach an agreement.

Google and Facebook protested the move and called for continued negotiations. Both companies also insist they have invested millions of dollars in initiatives in helping Australia’s struggling news industry.

‘Industry solution’  

Costello dismissed the need for further talks, saying the best way to address the issue is “an industry solution, where you sit down and try to estimate the value that Google and Facebook are getting from the use of this material. We think it’s A$600 million a year.”

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