France and Australia order Google and Facebook to pay for local news listings

News industry is one of most affected industry in COVID-19 outbreak with advertising revenue declining substantially. Though the online viewership has spiked due to lockdown but its conversion into equivalent dollar amount has dropped. It’s difficult to monetize digital readership to generate significant revenues. While traditional mediums like Print and Television are seeing major drop in income due to fall in advertising revenues on account of budget cuts by companies. Thus news companies are forced to take restructuring plan to stay afloat in this crisis leading to job and pay cuts.

Therefore to save news business from this fall the government of France and Australia have ordered Google and Facebook to pay for news listings in searches with news publishers.

French antitrust authorities ordered Google to negotiate with publishers to pay for the news content shown in search results. It is the first time that a major digital platform has been required to pay for news anywhere. Around 33,000 news media employees have been furloughed, to be laid off or to suffer reduced pay. France’s action stems from a new European Union Copyright Directive, and Germany and other countries will be next. This means that in the United States, the pressure to similarly compensate stressed local publishers will be extremely high.

Last year Facebook even agreed to pay a limited number of publishers for its News Tab. But most local publishers were left out of that deal. And Google has refused to pay them anything.

A group of French publishers didn’t accept that situation and brought a case against Google with the French competition regulator in November. On April 9, the regulatory agency decided that Google had abused its tremendous market power by refusing to negotiate. This decision is part of a larger, continuing competition investigation into Google. Once again, Europeans have been willing to be the first to address the power of the online platforms.

Taking Cue from France ruling, the Australian government instructed it’s Competition Commission to develop a mandatory code to address commercial arrangements between digital platforms and the news media. This code will deal with data, ranking, news display and the monetisation and the sharing of revenue generated from news. The draft of this code is expected to come in coming months and it will be interesting that how Google and Facebook fight against this ruling.

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