08:46 GMT25 February 2021
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    The Australian government moved to create a "code of conduct" to tackle what it says is an imbalance of power between Google and Facebook and local news media, with legislation attempting to force the giants to negotiate payments to outlets for use of their content. Both companies have threatened a partial pullout from the Australian market.

    Facebook CEO Mark Zuckerberg personally reached out to Australian officials to try to persuade them to change their position on the country’s "News Media Bargaining Code" legislation, but failed to convince them to change course, Treasurer Josh Frydenberg has revealed.

    Appearing on Insiders, the Australian Broadcasting Corporation equivalent to NBC’s Meet the Press, on Sunday, Frydenberg confirmed that he and Communications Minister Paul Fletcher talked with Zuckerberg last week after the Facebook chief “reached out” to Canberra.

    “Mark Zuckerberg didn’t convince me to back down, if that’s what you’re asking,” the treasurer said, when queried on whether the Facebook CEO had convinced the government to make any changes to its plans.

    “We’re in detailed discussions with Google, with Facebook, with the other players across the industry. This has not been a short conversation that we’ve had with these companies over these issues. This has been the product of an 18 month inquiry…and at every step of the way these businesses have been consulted,” Frydenberg added.

    The official also suggested that the talks have seen a shifting of the “goal posts” regarding the code, with the internet giants coming up with various excuses to try to get Canberra to change course.

    “Originally they had a concern with the algorithm requirements of notification. Then it was about the [Australian dollar exchange rate]. Then it was about the final arbitration model. Now we’re told that if we go ahead with this we’re going to break the internet. What I do know is that media businesses should be paid for content,” Frydenberg explained.

    The official added that Prime Minister Scott Morrison has already spoken to Microsoft about expanding into Australia with its Bing search engine amid Google’s threats to pull its Search function.

    Facebook joined Google in making dire warnings to Australia, with the latter company threatening to disable Australian users from being able to post news content to its platforms. In his interview Sunday, Frydenberg said he doesn’t dismiss Google’s threats, but is “not intimidated by them either.”

    Earlier this month, the search engine giant carried out an "experiment" blocking some domestic news websites from Google’s search results.

    Facebook and Google have balked at the idea of paying Australian media for news content, arguing that companies already gain from clicks and referrals to their websites.

    Washington recently joined the US-based internet giants in pressuring Canberra, arguing that the terms of the proposed code “raise concerns with respect to Australia’s international trade obligations.”

    Legislation on the code of conduct follows a comprehensive government review which found that Google and Facebook receive a whopping 80 percent of Australia’s total online advertising spending. The probe followed years of complaints by local media that its online content was not being fairly compensated.

    An estimated 19 million Australians use Google monthly – 17 million have Facebook accounts.

    Australia’s legislature is expected to make a final vote on the code of conduct sometime in February or March.

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