Google has joined with Facebook and has said it will pause the launch of its ‘News Showcase’ scheme in Australia.
On Thursday Google had officially announced the ‘News Showcase’ scheme, which would see news publishers in Australia, Brazil, and Germany starting to be compensated for the news they produce.
CEO Sundar Pichai pledged $1 billion (£778m) over three years to the scheme, which will be rolled out worldwide.
But the tech firms are very concerned at a law change in Australia, that will require companies such as Facebook and Google, to pay media outlets for content.
After Google had announced content deals in Australia, Germany and Brazil, the Australian Competition and Consumer Commission (ACCC) said it may bring in arbitrators to decide how much Google and Facebook should pay for news that appears on their sites.
Last month Facebook bluntly warned its local users it will prevent them sharing local and international news, if Australia presses ahead with this.
Facebook labelled the Aussie law as ‘bad legislation’ and said the law “defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”
Google has also previously expressed its opposition to this Australia legislation and used its search web page in Australia to warn local users that it would harm their ability to search.
But Australia has not backed down, with the country’s top antitrust regulator, ACCC Chair Rod Sims, saying last month that it was tech firms call if they choose not to comply.
With no sign of compromise from down under, Alphabet’s Google division has now dropped Australia from the launch of its ‘News Showcase’ compensation scheme.
Australia (along with Germany and Brazil) had been named as the first markets where Google would start paying publishers to feature their news.
According to Reuters, Google took the step because Australia’s antitrust body has since pushed for laws forcing Google to pay royalties for content industry-wide.
Google said it has therefore “paused” contracts with five local publishers whose news was due to feature on News Showcase, which presents content on swipeable cards it dubs story panels.
“As we work to understand the impacts of the news media bargaining code on partnerships and products, we have put this project on pause for now,” Google’s managing director for Australia and New Zealand, Mel Silva, told Reuters in an email.
“Although our concerns about the code are serious, we hope they can be resolved so we can bring News Showcase to Australia soon,” Silva said.