Google’s Payment Deal with Australian Media Firm

In News: Recently, Australia’s Seven West Media has become the first major media group in the country to sign a licensing deal with Google.

About the Deal

• In July 2020, the Australian Competition and Consumer Commission (ACCC) had proposed that media companies could bargain terms of payment for their articles featured in the news feed of online tech giants.
  • This means that if Google and Facebook include certain news items from media companies on their platform in various services, they would have to pay the media companies a certain amount.
  • It was a part of its efforts to tackle the rising powers of companies such as Google and Facebook.
• Key Highlights
  • Under the agreement, Google will negotiate individual licensing deals with newspapers and payments will be based on factors such as the amount of published news and monthly internet site traffic.
  • The legislation would create an arbitration panel to make binding decisions on payment in cases where a platform and a news business can’t agree on a price for news.
    • This would discourage both the platforms and news businesses from making unrealistic demands.
• Aims
  • To create a level playing field where market power is not misused and there is appropriate compensation for the production of original news content.
  • To remove the digital giants’ dominant bargaining positions.
• Implications
  • Owing to their worldwide presence, both Google and Facebook are likely to be under pressure paying for the news content which they use in other countries as well.
  • In countries such as France, Google has already signed deals with news publishers to pay for the news being included in its search feed.
  • Google claims it has offered similar deals to other news and media agencies across the world and governments across countries are likely to scrutinise these deals to check for the balance of bargaining power of the company.
    • For example, the European Union is also likely to propose legislation forcing big tech companies to pay for the content they use, despite the offer made by Google.

Source: IE