Could Google and Facebook's Australia deals spread to other markets?
Australia passed a bill that requires Alphabet Inc (NASDAQ:GOOGL)'s Google and Facebook Inc (NASDAQ:FB) to pay news outlets for the ability to share their articles. The companies caved to pressure and signed deals with News Corp (NASDAQ:NWSA) and several other news publishers so they could continue providing services in the country. Q4 2020 hedge fund […]
Australia passed a bill that requires Alphabet Inc (NASDAQ:GOOGL)'s Google and Facebook Inc (NASDAQ:FB) to pay news outlets for the ability to share their articles. The companies caved to pressure and signed deals with News Corp (NASDAQ:NWSA) and several other news publishers so they could continue providing services in the country.
Now the next question is whether other countries or news publishers will follow the same route as Australia and require Google and Facebook to pay for news content.
News publishers might want to be paid in other countries
Two different groups could influence whether Google and Facebook have to pay to share news content. The publishers themselves could start requiring payment, but they might not do that unless lawmakers in other countries decide to force the companies to pay up.
It stands to reason that news publishers could be attracted to Australia's new law and possibly enact their own requirements for the online platforms to share their content. However, it may not be in their best interests to do so.
"Since there can also be cases where publishers will lose out if they can no longer monetize the readers they receive from Google News," Elisha Elbaz, CEO of DigitalFuture and an expert on Google, told ValueWalk in an email. "If they had to share their Shareasale or CPA revenues with Google in turn, the shoe will [sic] be on the other foot. For this reason, I am not so sure it would benefit all publishers to adopt the Australian model."
It all depends on lawmakers
News outlets have a lot of pull when it comes to lobbying in Washington, so they could push lawmakers to pass a similar bill in the U.S. However, it doesn't mean they will. On the other hand, lawmakers have been focused on reining in Big Tech through new regulations. Thus, they could turn their attention to helping news outlets recoup some of the losses they have seen since they started losing money to the likes of Google and Facebook.
It may be some time before we know if other countries will adopt regulations similar to what Australia has passed. Those involved could wait to see how things develop there before deciding what to do elsewhere. Of course, if other markets move to the Australian model, it would take a bite out of Google's and Facebook's bottom lines. However, they can certainly afford to shell out money for news content by sharing some of the profits they took from traditional news publishers.
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