👉 Background: In 2021, there was a major dispute between big tech companies, like Google and Meta with Australian media outlets and the Aus Government. In short, Google and Meta were showing news articles from Aussie media outlets on their News tabs, without paying for it. This dispute lead Meta and Google to sign deals with large media companies in Australia worth $200 million per year in total.

👉 What happened: Earlier this year, Meta warned that they won’t be renewing their deal, but the media publishers and Federal government warned that they won't be giving up that easy. Now, the Labor government has warned that Meta and Google will be punished if they don’t agree to new content deals with publishers.

👉 What else: The government is looking at charging social media companies a financial penalty if they don’t try to negotiate the deals in “good faith”. And these financial penalties would be greater than the cost of striking commercial agreements with Australian partners… so pretty much... pay up!

What's the key learning?

💡Sometimes, the government feels the need to step in when big companies hold too much power.

💡The former government started with the "carrot" approach. They asked platforms to play nice and pay news publishers fairly through voluntary deals, and this worked... for a while.

💡But the goodwill from the carrot approach has run out and now they'll adopt the “stick” approach. If Meta decides not to renew those deals, they'll basically need to pay a fine.