As we know, Facebook and Google have absolute dominance in the digital advertising market and benefit greatly from the content of news publishers on their platforms, social media, search queries and digital videos.
This has a huge impact on the Australian news industry. The number of journalists and online newspapers has fallen by more than 20% since 2014 because the revenue from digital advertising has been massively recorded by both giants, Google and Facebook. .
To solve the dilemma, Australia will force social media companies to pay for content shared across their networks and release details of the algorithms that determine what their users see.
The move comes after Australia conducted a digital platform survey that published a final report in 2019 that Google and Facebook have distorted local media and advertising markets to make it difficult for publishers to monetize their content.
This study called for the development of a voluntary code of conduct that enables cash flow from social media to publishers.
This was done by Australian Treasurer Josh Frydenberg, who ordered the country's competitive watchdog to create a code of conduct for Facebook and Google that would force technology giants to pay Australian media companies for using their content.
"It's fair that those who generate the content get paid", said Josh Frydenberg.
The code would also dictate data sharing, news ranking, and revenue sharing. Sanctions are imposed if companies fail to comply with them, as well as a binding settlement procedure for any disputes.
On the other hand, the COVID-19 crisis has contributed to the deterioration of the financial situation of the media sector.
"Media companies are under significant financial pressure and COVID-19 has dramatically reduced advertising revenue in the industry," said Paul Fletcher, Australian communications manager.
It should also be noted that , 17 million Australians use Facebook every month and spend an average of 30 minutes a day on the platform, while 98% of Australian cell phone searches use Google.
In connection with this, Frydenberg said that Google earned 47% of online advertising spending without classified ads in Australia and Facebook claimed 24%.
He also said he believed Australia could be successful if other countries, including France and Spain, hadn't burdened Google and Facebook. "We are aware of the challenges and the complexity of ensuring a binding code. Many other countries have tried without much success."
Do you think the giants will respond to this brave decision?
