Treasurer Josh Frydenberg and Communications Minister Paul Fletcher on Monday instructed the Australian Competition and Consumer Commission (ACCC) to develop a code of conduct for digital giants including Google and Facebook by the end of July.
It will see Australia become the first government in the world to implement a legal regime to govern the behavior of the tech giants, including financial penalties for those that profit from content produced by news media.
The code will address the "imbalances the tech platforms and local news media companies."
Frydenberg said the fundamental issue identified by the ACCC's landmark digital platforms inquiry, the findings of which were published in July 2019, was that media companies were generating original content only to have it replicated for free on digital platforms.
The government last year instructed the ACCC to develop a voluntary code to address the imbalance, but Frydenberg said that limited success in early negotiations between the two sides and a sharp decline in ad revenue brought on by COVID-19 meant that a mandatory code was necessary.
"The groundbreaking report prepared by the ACCC into digital platforms was world-leading and now paves the way for a mandatory code of conduct requiring payment for content," he said in a statement.
"This will help to create a level playing field."
The code will include penalties and binding dispute resolution mechanisms for negotiations between digital platforms and news organizations.
The announcement of a mandatory code rather than a voluntary has been welcomed by Australian media executives.
"The decisive move by the Australian government to go directly to a mandatory code of conduct between the international tech giants and Australian news media companies is a vital step that can help secure the future of Australian journalism," Michael Miller, executive chairman of News Corp Australasia, said.
"It is essential the mandatory code corrects the power imbalance between the tech platforms and local news media companies and sets rules that lead to the platforms finally paying for the news content they take and profit from."
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