Industry responds as News Media Bargaining Code bill goes through parliament

ACCC news media mandatory bargaining code tabled this week sees digital players, Foogle and Facebook, required to pay Aussie publishers for news content

News of the Federal Government tabling the ACCC’s news media bargaining code of conduct bill this week in Parliament has been welcomed by several Australian news media organisations even as questions about the ongoing power of digital platform providers continue.

Confirmation of the News Media and Digital Platforms Mandatory Bargaining Code’s push through Parliament on 9 December was made this week in a joint speech and media release from Federal Minister for Communications, Cyber Safety and the Arts, Paul Fletcher, and Federal Treasurer, Josh Frydenberg.

The code, created by the Australian Competition and Consumer Commission (ACCC) and finalised in mid-2020, sets out mandatory steps both news media organisations and digital platform providers are required to take in order to negotiate payments for content featured across platforms managed by Google and Facebook.

The code’s release comes the back of the ACCC’s initial Digital Platforms Inquiry, first established in late 2017 by the Federal Government, which reported significant detrimental impact resulting from the dominance of digital platform giants, Google and Facebook, on Australia’s media and advertising landscape.

In December last year, a program of work including a voluntary code of conduct for negotiation around content between traditional news media organisations and the digital platforms kicked off. By April, this had become a mandatory negotiation code, driven by accelerated concerns around the future of news media organisations in the face of the COVID-19 crisis.

In a statement this week, the Morrison Government described the world-leading binding code as addressing the bargaining power imbalance between news media businesses and digital platforms. “The Code will ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia,” it stated.

Key elements of the code include encouraging both sides to undertake commercial negotiations outside the code, enabling digital platforms to publish standard offers, establishing a negotiation framework for both parties to bargain in good faith and reach binding agreements, and ensuring independent final arbitration is available to determine remuneration should parties be unable to reach agreement. It also sets out minimum standards for digital platforms dealing with news media organisations including requiring 14 days advance notice of deliberate algorithm changes that impact news media.

The final code tabled this week does make some concessions to the digital players from the draft code released by the ACCC, most notably acknowledgement of the value of traffic referred by the digital players to news media website from sharing their content during arbitration. It’s also adjusted notifications around advanced warning of algorithm changes and data.

The Code will initially apply to Facebook NewsFeed and Google Search and is being reviewed annually. The Federal Government also hasn’t ruled out other digital platform services being added to the code in future if it the evidence suggests they’re contributing to a bargaining power imbalance. 

“Digital platforms have fundamentally changed the way that media content is produced, distributed and consumed,” the joint Frydenberg and Fletcher statement said. “This code underscores the Morrison Government’s efforts to ensure the Australian economy is able to take full advantage of the benefits of digital technology while protecting a strong and sustainable Australian news media.” 

Industry responds to latest bill

The latest step in the code’s evolution was welcomed across the news media industry. In a statement, Seven West Media managing director and CEO, James Warburton, congratulated the Morrison Government for pioneering what it sees as an innovative process for the modern media age.  

“It’s a sensible and fair proposal, as it should be. The revised Code provides the concessions to the digital platforms that they have been asking for,” Warburton said. “There’s now no reason for Facebook or Google to be unwilling to negotiate fair agreements. Australians will be the winners under the code, with local media businesses that produce local news and content and support local jobs now provided with a pathway to a sustainable future.”  

However, while a Nine spokesperson said the business was “grateful” for the ACCC code and process, it was still concerned about the ongoing power of digital platforms overall.  

“The continued concessions to the digital platforms only entrenches both their monopoly power and the significantly unfair imbalance in regulation,” the statement read. “These companies pay little or no tax, contribute little and often negatively to our culture, and employ no creative teams.  

“The notion they receive regulatory recognition with the so called two-way value exchange, for something they already have a commercial model to monetise, seriously undermines the fundamental problem the ACCC identified in the beginning of this process - that is an abuse of monopoly power which fundamentally harms the future sustainability of media in Australia.”

Chief executive officer of industry body Commercial Radio Australia, Joan Warner, said the legislation was a positive step forward and one it'd be watching closely. 

“We’re pleased the legislation has now made it into Parliament after a lengthy consultation process. It is a world first approach and we’re optimistic it will lead to positive commercial outcomes for radio," Warner said. "We will be closely watching the passage of the bill in the first sitting of the new year.”

Both Facebook and Google told CMO they were now reviewing the legislation and would provide further comment at a later stage.

“We’ll continue to engage through the upcoming parliamentary process with the goal of landing on a workable framework to support Australia's news ecosystem," Facebook Australia managing director, Will Easton, said.

In a joint statement released on 23 November in preparation for the code’s tabling, organisations from Seven West Media, FreeTV, Nine, Win, Ten, News Corp, Guardian Australia, SCA, Prime Media Group and Commercial Radio Australia, Australian media houses described the code as “an opportunity to good to miss”.

Australian media companies can’t avoid using the digital platforms to reach news consumers. Conversely, no single individual media business is critical to the platforms. The result is a significant imbalance in bargaining power,” the companies stated. “That’s why we need a News Media Bargaining Code. To survive, local news media businesses must be able to negotiate a fair contribution to the cost of creating content that directly contributes to significant local profits made by Google and Facebook.”  

Yet the code hasn’t been so well received by Google or Facebook, which have both criticised the move on several occasion. In one blog post, Google Australia MD, Mel Silva, said the Government’s “heavy handed intervention threatens to impede Australia’s digital economy and impacts the services we can deliver to Australians” and said it was not “anchored in commercial reality”. Both have also strived to highlight the referral traffic value their sites provide news media organisations.  

In another post in September, Google Australia warned SMEs using its advertising services could be negatively impacted by the News Media Bargaining Code by putting those digital services at risk.  

“While we don’t oppose a code governing the relationship between digital platforms and news businesses, the current draft Code has implications for everyone, not just digital platforms and media businesses,” Google said in that post. Specifically, it highlighted the need to share advanced notice of any algorithm changes as giving larger news media organisations preferential treatment.  

“The draft code would also create a mandatory negotiation and arbitration model that only takes into account the costs and value created by one party—news businesses. The code’s provisions mean costs are uncapped and unquantifiable, and there is no detail on what formula is used to calculate payment,” the blog post continued.  

“Regulation framed in this way would set a bad precedent. Most businesses support sensible regulation—but not heavy-handed rules that favour one group of companies over all others.”  

In a blog post in August, Facebook A/NZ MD, Wil Easton, threatened to stop publishing local news content if the code became law based on its draft state.  

“We share the Australian Government’s goal of supporting struggling news organisations, particularly local newspapers, and have engaged extensively with the Australian Competition and Consumer Commission that has led the effort. But its solution is counterproductive to that goal,” Easton stated at the time.  

“The proposed law is unprecedented in its reach and seeks to regulate every aspect of how tech companies do business with news publishers. Most perplexing, it would force Facebook to pay news organisations for content that the publishers voluntarily place on our platforms and at a price that ignores the financial value we bring publishers.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.

 

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