News Media Bargaining Code passes Parliament

News comes two days after Facebook opts to turn Australian news back on after last-minute amendments to the Code

Australia’s News Media and Digital Platforms Bargaining Code has officially passed through the Senate a day after the Government confirmed last-minute amendments made as part of the Morrison Government’s negotiations with Facebook over the past week.

The Code, initially created by the Australian Competition and Consumer Commission (ACCC) following its Digital Platforms Inquiry, legislates the requirement for digital platform giants, Facebook and Google, to engage in an arbitration process with news media organisations to ensure news media are renumerated for their content as part of efforts to address the power imbalance between the two sides.  

Endorsed by the House of Representatives in December and then the Australian Senate in February, the Code was officially passed at a Senate meeting yesterday following final debate.

The Code aims to provide a framework for good faith negotiations between the parties and a fair and balanced arbitration process to resolve outstanding disputes. It’s this mandatory negotiation process, however, that’s been one of several big sticking points for the digital giants, who repeatedly labelled the Code ‘unworkable’ in the lead-up to its adoption.

Off the back of the Senate’s endorsement in February, Google has kicked off fresh negotiations with news media giants around its alternative solution to paying for news in organic search feeds, Google Showcase. Launched in Australia in the last two weeks, this sees Google pay licensing funding to news media owners in return for premium news content being featured across the Google Showcase offering.

News media companies signed up already include News Corp, Seven West Media, Private Media, Junkee Media and The Guardian.

By contrast, Facebook’s response was to restrict Australian news content being featured across its platform and user feeds.  Earlier this week and following further discussions with the Government on amendments to the Code, Facebook announced it would turn back on Australian news in coming days.

These amendments include notifying digital platforms of the Government’s intention to designate prior to any final decision and with at least one month’s notice. The Code will also make it clear non-differentiation provisions will not be triggered because commercial agreements resulted in different remuneration amounts or commercial outcomes that arose in the course of usual business practices.

Final offer arbitration has also been emphasised as a last resort where commercial deals cannot be reached by requiring mediation, in good faith, to occur prior to arbitration for no longer than two months.  

Shortly after Facebook announced its decision to turn back on Australian news, Facebook and Seven West Media announced a newly struck commercial partnership that is expected to see SWM paid for its news content via a licensing agreement. While details have not yet been confirmed, the deal is expected to involve Facebook’s own Facebook News offering.

In a joint statement today, Australian Treasurer, Josh Frydenberg, and Minster for Communications, Urban Infrastructure, Cities and the Arts, Peter Fletcher, said the Code represents a significant microeconomic reform. And it’s one that has drawn the eyes of the world on the Australian parliament.

“Our commitment to legislating the Code reflects the importance of a diverse and well-resourced news media sector to our democracy and the Australian people,” the pair said. “The Government would like to thank all stakeholders for their contribution throughout this process, particularly the ACCC for its ground-breaking research which led to the drafting of the Code.”  

The pair also said the Government is pleased to see progress by both Google and Facebook in reaching commercial arrangements with Australian news media businesses.

As part of its endorsement, the Code will be reviewed by Treasury after one year of commencement.

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