Big Tech hunts for 11th-hour deals as Australia news code looms

Google and Facebook are rushing to agree deals with Australian publishers in a bid to persuade Canberra not to impose world-first rules that would force the tech groups to pay news providers for content.

MPs began debating legislation on Wednesday to enact the news media bargaining code, which the EU, UK and Canada are considering as a model for similar regulations to support publishers in their own jurisdictions.

Among the code’s features is an arbitration system that would make binding decisions on the fees Facebook and Google would have to pay news providers if commercial negotiations fail.

Google signed a letter of intent on Wednesday with Nine Entertainment, one of Australia’s largest media groups, that outlines a draft agreement to use content from its newspaper, television and internet assets, according to a person directly familiar with the deal.

The tech group said on Wednesday it had also struck a deal with Junkee Media to curate the small online publisher’s content on its recently launched News Showcase service.

Those followed a similar agreement with Seven West Media, a group with TV, newspaper and digital assets, inked on Monday that is reported by Australian media to be worth A$10-30m (US$7.8-23.3m) per year.

Rupert Murdoch’s News Corp and Google are also in talks for a potential global content deal, according to people with knowledge of the negotiations.

Experts said the tie-ups reflected Google’s desire to ensure Canberra did not apply the toughest elements of the code to its core search function, which the US group has warned it could be forced to close down in Australia.

“Google is desperate to not pay for news delivered through their search engine. It looks like they are paying over and above market value to secure deals that specifically exclude Google Search,” said James Meese, a lecturer in communications at RMIT University in Melbourne.

Canberra and Google could be coming to some sort of a “tacit agreement”, he added, whereby the government would not apply the code to the tech giant’s search function if it signed enough deals with publishers.

Josh Frydenberg, Australia’s treasurer, said none of the commercial deals would have been struck without the code, which had ushered in a “historic moment” for news businesses. The legislation would be enacted through parliament but the government would decide if it was enforced against Google’s search service or Facebook, he said.

“With respect to the designation of Google Search or Facebook, they are decisions that I would make after receiving the advice” of Australia’s competition regulator, he told Sky. “But if there are commercial deals in place then that becomes a different equation for me.”

Google and Facebook have not released details on how much its deals with publishers are worth, but they are not expected to reach the A$1bn a year that News Corp signalled the tech groups owed Australian media owners.

Google last year pledged $1bn over three years to pay global publishers and has said it reached terms with 450 “news partners”.

Facebook has made less progress in signing deals with publishers although it remains in negotiations, said people directly familiar with the matter.

The Sydney Morning Herald, the Nine-owned newspapers that first reported the draft deal between Google and its parent, said it would be worth more than A$30m a year.

Additional reporting by Richard Waters in San Francisco and Alex Barker in London

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