Tech giants will have to pay Australian commercial media for news content by the middle of next year or face fines of up to $10 million.
Under a new code of conduct to be legislated, Google and Facebook will likely have to pay millions to Australia’s news outlets.
They’ll have three months to negotiate the payments and then a binding arbitration process will come into play.
Treasurer Josh Frydenberg said the world-leading rules were about giving Australian media a fair go.
“Nothing less than the future of the Australian media landscape is at stake with these changes,” he told reporters in Melbourne.
But Google criticised the plans as heavy-handed and not forward-thinking.
“It sends a concerning message to businesses and investors that the Australian government will intervene instead of letting the market work, and undermines Australia’s ambition to become a leading digital economy by 2030,” Google Australia managing director Mel Silva said.
“It sets up a perverse disincentive to innovate in the media sector and does nothing to solve the fundamental challenges of creating a business model fit for the digital age.”
The code also requires digital platforms to give news outlets 28 days notice of algorithm changes that would affect the ranking or display of news content and advertising.
It bans digital platforms from discriminating against Australian media taking part.
Public broadcasters ABC and SBS won’t be able to seek payment for their content but they will benefit from the other protections.
The treasurer will decide which digital platforms are subject to the new rules and the Australian Communications and Media Authority will work out which media companies are eligible.
Draft legislation for the code will be available for comment until August 28 and is expected to go to federal parliament shortly afterwards.
Facebook and Google have a stranglehold on the digital advertising market, leaving traditional media companies struggling to stay profitable.
Journalists union head Marcus Strom said their business model had destroyed newsrooms around the world.
But Ms Silva said the government’s plans ignored the $218 million worth of clicks Google sent news publishers each year for free.
Communications Minister Paul Fletcher said the point of the code was to encourage commercial negotiations.
“The business model of the digital platforms is to aggregate content not to produce their own content, and then to attract eyeballs to that content which they can monetise through advertising, and they’ve done that very successfully,” he told reporters in Sydney.
News Corp Australia has suggested its content is worth $1 billion, while Nine estimates its content value at $600 million.