A landmark code that will force Google and Facebook to compensate media companies for their news content is certain to become law, after the federal opposition agreed to back the legislation.

Labor resolved to support the bill at its caucus meeting on Tuesday, formalising its position after declaring its in-principle support for the code last year.

A landmark code to force Google and Facebook to compensate news companies for their content will become law after the opposition agreed to support the bill.Credit:Getty

The Morrison government is expected to kick off debate on the bill as early as Wednesday and Labor’s support should ensure its swift passage through Parliament.

However, Guardian Australia, the ABC and Nine Entertainment Co (owner of this masthead) could complete deals with Google Australia before the news media bargaining code becomes law. The companies are in late-stage negotiations with the $1.8 trillion tech giant for use of their content on various Google services.

Prime Minister Scott Morrison and Treasurer Josh Frydenberg have urged Google and Facebook executives to strike deals ahead of the code’s implementation in a series of high-level discussions, spurring a flurry of negotiations this week.

Industry sources briefed on the negotiations said Google had been more proactive in its efforts to land deals with the large news publishers than Facebook.

In a joint statement, Mr Frydenberg and Communications Minister Paul Fletcher said it was “encouraging” to see the tech giants and publishers were reaching commercial agreements.

“The code creates a framework for parties to reach commercial agreements so that news media businesses are fairly remunerated for the content they generate. A central feature of the code is that it encourages parties to undertake commercial negotiations outside the code,” the statement said.

The ministers also confirmed the government would make a number of technical amendments “to improve the workability of the code” when it brought the bill on for debate later this week.

These include streamlining the requirements for digital platforms to give advance notice of algorithm changes to media companies, and amending arbitration provisions to include a consideration of the “reasonable costs” of both the digital platforms and news publishers. The changes will also clarify that compensation under the code is to be in the form of lump-sum payments.

The code is designed to act as a back-stop to ensure news businesses are able to broker deals with Google and Facebook for the value the tech giants get from having news content on their platforms.

In the event the parties can’t agree, the code provides a framework for the news businesses to trigger a mandatory bargaining process that gives an arbitrator the ability to decide the size of the payment. It will also force the tech giants to comply with a number of strict regulatory provisions, including giving media companies 14 days’ notice of major algorithm changes.

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