As COVID-19 truncates media profits, Australia orders digital platforms to split revenue

Mega-companies like Facebook and Google will now have to share advertising revenues with media companies in Australia.

Australia would now have a compulsory code of conduct for such digital companies. This is part of a bigger plan to deal with the steep decline in advertising triggered by the advent of COVID-19 pandemic.

The decision was announced by Australia’s treasurer Josh Frydenberg.

Back in December 2019, Australian government had directed the Australian Competition and Consumer Commission to come up with a code among media companies and digital platforms.

As part of this code, the digital platforms were asked how they pay media companies for using their content, and how industry changes affect the relationship between the two entities, and whether digital companies loop in original content or their own rebranded content.

They would now be liable to share all such data with media companies.

Even though the code was supposed to be finalised in November 2020, it has now been pushed back owing to the mounting decline in ad revenue, triggered by coronavirus.

Australia was one of the first countries to respond to the outbreak and has since then managed to limit its spread.

A mandatory could should be in place by July, or at least a pilot draft of it.

The code will include penalties and dispute resolution mechanisms in place.

Media has been adversely affected by the pandemic, especially newspapers and magazines, whereby many small publications have had to shut down temporarily or permanently to avoid incurring long-term losses. Many have also laid off staff and asked others to go on an indefinite leave.