A dispute over a planned law that would force tech giants Facebook and Google to pay for news content in Australia is being keenly watched worldwide.
The world-first law aims to address the media’s loss of advertising revenue to US tech firms.
If passed, the law could have global consequences for tech firms and how we access news online.
But the tech firms have pushed back, with Facebook restricting news content in Australia.
How did we get here?
There have long been concerns about the market dominance of tech firms over media organisations.
Google is the dominant search engine in Australia and has been described by the government as a near-essential utility, with little market competition.
So, in 2018, an Australian government regulator launched an inquiry into the impact of Google and Facebook on competition in media and advertising.
The inquiry by the Australian Competition and Consumer Commission (ACCC) found an imbalance of power between tech firms and the media.
Given this, the regulator recommended introducing a code of conduct that it said would level the playing field.
In July last year, the Australian government unveiled a draft law to enforce the code, provoking threats from Facebook and Google to withdraw services in the country.
What is the draft news code?
The draft calls on tech companies to pay for content, though it does not define what it is worth.
The law would enable news companies to negotiate as a bloc with tech firms for content which appears in their news feeds and search results.
If negotiations fail, the matter could be arbitrated by the Australian Communications and Media Authority.
Penalties could be up to A$10m (£5m; $7m) per breach, or 10% of the company’s local turnover.
The government says the code will initially focus on Google and Facebook but could be expanded to other tech companies.
Why is Australia pushing this law?
The government has argued that tech giants should pay newsrooms a “fair” amount for their journalism.
In addition, it has argued that the financial support is needed for Australia’s embattled news industry because a strong media is vital to democracy.
Media companies, including News Corp Australia, a unit of Rupert Murdoch’s media empire, have lobbied hard for the government to force tech firms to the negotiating table amid a long-term decline in advertising revenue.
Meanwhile, Google’s revenues have increased markedly in the same period, amounting to more than $160bn (£117bn) globally in 2019.