ROME, Aug 5 (Reuters) - Italy is set to adopt rules aimed at helping publishers obtain "fair payment" from online giants that use their content, a draft decree seen by Reuters showed. The decree enacts European copyright legislation approved in 2019 to help publishing houses meet the competition from dominant internet players who erode their advertising revenue. The European Union rules are aimed at pushing Google (GOOGL.O) and other online platforms, such as Facebook (FB.O), to sign licensing agreements with publishers and other content producers. Under the proposed legislation, which is still to be finalised, Italy"s communications watchdog would be given powers to set criteria determining how much large web-based firms should pay for using publishers" content. This would give publishers a basis to negotiate better contractual terms. In the absence of an agreement, either of the two sides will be able appeal to the regulator to establish how much the online platforms should pay, the draft showed. The decree also prevents online giants from blocking any content pending a negotiation with publishers. The legislation is expected to be approved at a cabinet meeting on Thursday. It will need the backing of parliament before taking effect.