The Facebook CEO, however, was unable to shift the Australian government’s position on introducing the News Media Bargaining Code.
The treasurer revealed on ABC Insiders that last week Communications Minister Paul Fletcher and himself had a “very constructive discussion” with Zuckerberg about the Code and its “impact on Facebook.”
When pressed on whether Zuckerberg was able to change his mind, Frydenberg responded, “Mark Zuckerberg didn’t convince me to back down, if that’s what you are asking.”
The treasurer has stated repeatedly that the Media Code was being watched closely around the world. He revealed that rival tech giant Microsoft was watching the developments closely.
“The Prime Minister has spoken to the CEO and president of Microsoft, as you know they’ve got Microsoft Bing,” he said.
“They’re watching this very closely and, no doubt, see opportunities in Australia to expand too,” he added. “This is world leading, what we’re doing.”
The Australian government is currently implementing its News Media Bargaining Code that will set out a process whereby news media companies can negotiate a payment deal with Google and Facebook.
For years, the tech giants have generated large amounts of web traffic and engagement from displaying news content at no cost. In turn, they monetised the traffic by selling advertising.
The Media Code was created partly to address this issue and to “level the playing field” between the digital giants and local news companies.
Frydenberg previously stated, “For every $100 spent by advertisers in Australia on online advertising … $47 goes to Google, $24 to Facebook and $29 to other participants.”
Both Google and Facebook have stated that they were prepared to remove news content entirely from their platforms to avoid paying news media publishers.
Last week, Google went a step further and told a Senate committee that as a last resort it would consider withdrawing the Google Search service entirely from Australia, opening a door for potential competitors Bing, DuckDuckGo, and Yahoo! to expand their market share.
Dr. Rob Nicholls, associate professor at the University of New South Wales and competition law expert, previously told The Epoch Times that the strong response from Silicon Valley was over fears the Australian Media Code could usher in a domino-effect of global regulation.
“(The Media Code) will also embolden other jurisdictions to push for a similar outcome as in France, or as proposed in Australia,” he said.
Google very recently agreed to pay 300 French news publishers to display their content.
The Australian law however has wider implications. It sets a national framework that gives all eligible news organisations a chance to enter into negotiations with the tech giants. The framework also contains a final arbitration model that guarantees a payment deal will be finalised.
In recent years, Australian regulators have opened up several fronts in their battle to regulate the digital giants including scrutiny of Google’s acquisition of FitBit, and a pending court action against Facebook for secretly harvesting personal data through a subsidiary.
“Google’s significant presence across the whole ad tech supply chain, combined with its significant data advantage, means Google is likely to have the ability and the incentive to preference its own ad tech businesses in ways that affect competition,” ACCC Chair Rod Sims said.
The ACCC is exploring potential ways to break the tech giant’s dominance of this area.