News Media companies cash in ahead of laws on tech giants

Media companies cash in ahead of laws on tech giants

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Google is striking a series of lucrative deals with local media firms ahead of world-first laws forcing tech giants to pay for Australian news.

The news media bargaining code will soon become a reality, with Labor offering the government bipartisan support.

Pre-empting the new regime, Nine and Seven have struck deals with Google, with the media companies to receive lump sums rather than be paid per click or view, which Google warned would break its search engine business model.

Nine’s deal is expected to be worth $30 million per annum over five years.

Seven has a letter of understanding with Google understood to be worth more than $30 million.

Facebook is yet to do any deals with Australian media organisations.

The platforms are encouraged to strike deals outside the code, but if commercial agreements cannot be reached the code will act as a safety net, with mandatory arbitration to extract payment for news.

A panel – decided by the negotiating parties or the media watchdog – would hear both offers and make a decision.

After talks with Google and Facebook, the Treasurer agreed to amend the draft bill to make it clear that tech giants are expected to pay news organisations a lump sump, rather than for every time a user clicks on a link.

He will bring the amendments to Parliament on Wednesday.

Google had threatened to pull its search engine from Australia if it had to pay news companies for every link it shares to their articles.

Mr Frydenberg says the amendments also streamline requirements for digital platforms to give advance notice of algorithm changes.

“They will enhance the way it operates and strengthen its ability to foster more sustainable public interest journalism in Australia,” he said.

Seven West chairman Kerry Stokes said the news media bargaining code led to fair payment that would ensure the company’s digital future.

“The negotiations with Google recognise the value of quality and original journalism throughout the country and, in particular, in regional areas,” Mr Stokes said.

Google had already struck deals with smaller publishers including Australian Community Media, InDaily, Solstice and Private Media.

The Showcase feature allows users to read articles on a Google app for free that would otherwise be behind paywalls.