The federal government is set to cave in to the demands of Google and Facebook, with preparations under way to water down its media bargaining code ahead of a parliamentary showdown this week.
Legislation introducing a code, which would force Google and Facebook to enter into final offer arbitration to determine revenue sharing deals with media companies over the sharing of news content, is to be debated in parliament this week, after being given the green light by a government-led Senate committee on Friday.
But negotiations are still taking place behind the scenes on the final shape of the legislation, and the government appears willing to make significant concessions to the Big Tech firms.
The government confirmed that it will amend the legislation, which is scheduled for debate in Parliament on Wednesday.
It comes as Seven West Media on Monday became the first major Australian media company to sign a deal with Google to have its news content featured on Google Showcase as part of a deal believed to be worth more than $30 million per year.
Prime Minister Scott Morrison and Treasurer Josh Frydenberg are pushing for Google and Facebook to sign more deals like this with other major media players outside of the bargaining code, and are understood to be willing to make major concessions if this takes place.
The government is reportedly willing to alter the code to not designate Google’s search engine or Facebook’s news feed as subject to the revenue sharing deal. This amounts to a huge capitulation to the Big Tech demands.
These are the firms’ most significant services, and the primary means through which users are presented with news content.
The government is also set to delay making these designations in order to give Google and Facebook more time to finalise the deals with the media companies.
The tech firms have been in discussions with media companies this year in an effort to secure these deals outside of the code, with negotiations including clauses that the deals can be scrapped if the bargaining code is passed into law.
Seven West Media on Monday informed the market that it had agreed to a “long-term partnership” with Google to have its new content featured on Showcase, which was launched earlier this month in Australia.
The company’s chair Kerry Stokes thanked Mr Morrison and Mr Frydenberg for being “instrumental” in securing the agreement.
“Their outstanding leadership on the implementation of the proposed news media bargaining code has resulted in us being able to conclude negotiations that result in fair payment and ensure our digital future,” Mr Stokes said.
Speaking on ABC radio on Monday morning, Mr Frydenberg said more deals are “very close”.
“Both the media proprietors and the digital giants I think recognise that we have something that is workable here in Australia, something that we can take forward, something that can ensure a stable media landscape, and something that will see journalism continued and journalists rewarded for creating original content,” he said.
Later in the day, Mr Frydenberg confirmed that amendments would be made to the legislation, which is to be debated in the party room on Tuesday before its presentation to Parliament on Wednesday.
The inking of these deals will likely give the government the justification to significantly water down the bargaining code to satisfy the tech giants, ensuring that they do not withdraw their services in Australia.
Despite recommending the legislation be passed, the Senate committee’s report late last week did allow room for amendments.
“The committee accepts that there remains the possibility that not all risks have been taken into account, and that further refinements may be needed to the arbitration mechanisms and other parts of the code so that they work in an optimum manner,” the report said.