The "world-first" draft laws will create a level-playing field in the country's online advertising market, the government says. In response, Facebook said the legislation "misunderstands the dynamics of the internet."
Tech giants will negotiate with Australia's media companies over how much they will pay to access their news
The Australian government on Wednesday introduced to Parliament legislation to force tech giants Google and Facebook to pay news organizations for their journalism.
The laws "will address the bargaining power imbalance between news media businesses and digital platforms," Treasurer Josh Frydenberg said in a statement.
The draft legislation, officially named the News Media and Digital Platforms Mandatory Bargaining Code, will "ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia," Frydenberg said.
"It's designed to level the playing field and to ensure a sustainable and viable Australian media landscape," he said.
Under the code, tech giants will be encouraged to negotiate with major media firms in Australia, including public broadcasters, over the price they would pay to access their news.
If they are unable to reach an agreement, an independent arbitrator would be appointed to make a binding decision. Digital platforms could face fines up to Aus$10 million (€6.13 million, $7.4 million) in case they do not comply with the decision.
The draft code was first released in July in which the government had initially planned to exclude state-funded media, Australian news Corp. and Special Broadcasting Service from being compensated by the tech companies.
But under the latest draft laws, those broadcasters will be paid like commercial media businesses.
The draft legislation will initially apply to Facebook NewsFeed and Google Search, but will be expanded to include other digital platforms as well "if there is sufficient evidence to establish that they give rise to a bargaining power imbalance," Frydenberg said.
He claimed that for every 100 dollars of online advertising spend, 53 dollars went to Google, and Facebook took 23 dollars.
Speaking to reporters in Canberra on Tuesday, Frydenberg called the legislation "a huge reform."
"This is a world first. And the world is watching what happens here in Australia," he said. "This is comprehensive legislation that has gone further than any comparable jurisdiction in the world."
The code was developed by the Australia Competition and Consumer Commission (ACCC) over three years after a public consultation which included the social media platforms as well as Australian news organizations.
Since the initial proposal in July, the government has also made concessions to the tech companies, according to Australian news reports.
For instance, it excluded YouTube, Google News, and Instagram from the list of platforms. Also, the companies will get credit for the online traffic they drive to the news organization, and its monetary value will be recognized.
The draft laws have received broad political support in Australia and are likely to be voted on in parliament early next year.
The tech companies have long pushed back against such proposals, and Facebook has warned that it might block Australian news content than pay for it.
The social media giant has argued that the new regulation "misunderstands the dynamics of the internet and will do damage to the very news organizations the government is trying to protect."
Facebook Australia's managing director Will Easton told reporters on Tuesday that he had not seen the draft law and would review it once it was introduced to Parliament and made public.
"We'll continue to engage through the upcoming parliamentary process with the goal of landing on a workable framework to support Australia's news ecosystem," he said.
Google, for its part, said the proposed laws would result in "dramatically worse Google Search and YouTube," put free services at risk and could lead to users' data "being handed over to big news businesses."
adi/rt (AP, dpa)