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Google and Facebook warned by Australian competition law

Australia’s competition regulator has warned that Google and Facebook, two of the world’s largest online media companies, are in breach of a proposed law that would make Australia the first country in the world to force them to pay for news content. The Australian government announced the legislation after an investigation showed the tech giants had a “significant influence” on the Australian media industry, a situation it said posed a potential threat to a well-functioning democracy. The code states that “Google or Facebook will be subject to mandatory price arbitration unless a commercial agreement to pay to Australian media can be reached,” Rod Sims said in an interview with Reuters Next.

At the heart of the proposed Australian scheme is a two-way value swap that would be used by referees to make binding decisions. To achieve this, Facebook and Google must take into account the value of Australian media content used in their content, as well as local media content. Local media companies must also take into account any value they receive from their users who view their content. Digital platforms could be fined up to $1.5 million (1.2 million euros) a day if they fail to comply with the ruling.

Australian media companies are unhappy with the two-way aspect of the code, but critics note that this part of the law is not being observed. Google has declared it unworkable, notably by failing to inform publishers up to two weeks in advance of certain changes to algorithms and internal practices.

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