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A proposed mandatory code of conduct for overseas digital platforms will be designed to support Australian publishers and level the imbalanced playing field.
Included in the government's proposal are arrangements to ensure the sharing of data between publishers and digital platforms and the monetisation and sharing of revenue generated from news.
The code of conduct will be developed by the Australian Competition and Consumer Commission (ACCC) and will draw upon the organisation's findings from the 2019 Digital Platforms Inquiry.
Last year the ACCC determined that there was a powerful imbalance in bargaining power between digital giants like Facebook and Google and Australian publishers both large and small.
READ MORE: ACCC: Facebook and Google's power distorts companies' ability to compete
In December 2019 the Federal Government directed the ACCC to facilitate the development of voluntary codes to address this imbalance.
Today the Federal Government has decided that the original timeframe set out requires acceleration, particularly considering the significant pressure media organisations are under thanks to lower levels of advertising due to the coronavirus financial crisis.
Further, the ACCC has advised the government that it is unlikely a voluntary agreement would be reached with respect to the key issue of payment for content, resulting in this proposed code of conduct becoming mandatory.
The first draft of the code of conduct will be released for consultation by the ACCC before the end of July 2020, with a final code to be settled thereafter.
"The Government is delivering a regulatory framework that is fit for purpose and better protects and informs Australian consumers, addresses bargaining power imbalances between digital platforms and media companies, and ensures privacy settings remain appropriate in the digital age," says the Federal Government.
The proposed mandatory code of conduct comes during significant upheaval within the media industry.
The lifeblood of privately held Australian publications, both large and small, is advertising.
As the coronavirus crisis has caused many Australian businesses to tighten their belts advertising spend has been one of the first discretionary costs to be cut loose.
One of Australia's largest radio organisations Southern Cross Austereo (ASX: SXL) reported earlier this month that it has seen a 10 per cent dip in advertising over the last nine months, which is expected to worsen during the Covid-19 financial crisis.
News Corp recently suspended 60 community titles in New South Wales, Victoria, Queensland and South Australia because of a rapid decline in advertising revenue.
AAP Newswire announced its closure in early March, citing the rise of free online content as reason behind the company's demise. Since then the media organisation has announced it is in early talks with a potential buyer of the entire business.
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