Facebook to Pay News Usage Fees... Rapid Progress Toward Monetization

Australia Passes Legislation Imposing Charges on Platform Companies

[Asia Economy Reporter Yujin Cho] As the Australian government passed a bill imposing news usage fees on major information technology (IT) platform companies such as Facebook and Google, the global trend toward paid news services is expected to accelerate rapidly.

According to major foreign media on the 24th (local time), Facebook, the world's largest social networking service (SNS), announced that it will spend more than $1 billion (about 1.0172 trillion KRW) over the next three years to secure rights to news content. Nick Clegg, Facebook's Global Affairs Chief, stated in a press release, "Facebook is ready to support news media," and "We fully recognize that quality journalism is at the core of how an open society functions."

This move came as governments around the world, including Australia, are pushing bills to mandate IT platform companies to pay news usage fees. The Australian Parliament passed the 'News Media Bargaining Code' on the same day, which requires IT platform companies to pay content usage fees to news organizations for using their news.

With this, Australia became the first country to legislate that digital platforms such as Facebook and Google pay news content usage fees to news organizations. Australian Treasurer Josh Frydenberg stated in a press release, "News media businesses will receive fair compensation for the content they create."

Facebook had previously suspended its news service in protest against the Australian government's bill mandating news usage fees but restored the service after one week. A Facebook legal spokesperson said, "We took necessary measures before the new law came into effect."

Facebook is also reportedly negotiating news usage fee agreements with local media in Canada, where a similar bill is being prepared. According to anonymous sources, Facebook has entered negotiations with Canadian media regarding payment for news usage rights and is discussing licensing agreements.

The European Union (EU) is also considering adding provisions to the Digital Services Act requiring platform operators to pay fees for news content usage, suggesting that discussions on paid news by IT platform companies will gain momentum.

Earlier, Google also announced plans to spend $1 billion over three years to secure news usage rights. Google has signed usage fee agreements with major Australian media company Seven West Media and news organizations affiliated with Rupert Murdoch's News Corporation in Germany. Microsoft (MS) has also expressed support for imposing news usage fees and plans to cooperate with the media industry in Europe to prepare related legislation. Major foreign media have evaluated this as "the business models of global platform companies are being overturned."