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Industry applauds new ACCC draft code of conduct between news media and digital platforms

Australian Competition and Consumer Commission's draft code of conduct sets out mandatory negotiating conditions between news media organisations and Google and Facebook over content

Australia’s media and industry commentators have been quick to applaud the ACCC’s mandatory draft code for negotiation between traditional news organisations and digital platforms giants aimed at restoring the balance of power between new and old media.

The Australian Competition and Consumer Commission (ACCC) today released its draft news media bargaining code of conduct, outlining mandatory steps both sides are required to take in order to negotiate payments for content featured across digital platforms managed by Google and Facebook.

Under the mandatory code proposed, news media organisations would notify Google or Facebook of their intention to begin bargaining over content payments, as well as any other issues they want to negotiate. The code allows for a three-month negotiation and mediation timeframe between both parties. Should no agreement be reached, an independent arbitration process would occur, resulting in a binding agreement within 45 days based on whichever offer is deemed most reasonable.

The code also allows media organisations, such as regional and community mastheads, to join forces and collectively bargain with digital platforms. What’s more, while the code initially applies only to Google and Facebook, the ACCC has said other digital platforms may be added if they scale to similar bargaining power heights against Australian news media businesses.

“There is a fundamental bargaining power imbalance between news media businesses and the major digital platforms, partly because news businesses have no option but to deal with the platforms, and have had little ability to negotiate over payment for their content or other issues,” ACCC chair, Rod Sims, said. “In developing our draft code, we observed and learned from the approaches of regulators and policymakers internationally that have sought to secure payment for news.

“We wanted a model that would address this bargaining power imbalance and result in fair payment for content, which avoided unproductive and drawn-out negotiations, and wouldn’t reduce the availability of Australian news on Google and Facebook.”

In addition to the negotiation conditions, the ACCC’s code sets down minimum and enforceable standards governing non-payment related issues between major platforms and news media businesses. One is that digital platforms would be required to give news media businesses 28 days’ notice of algorithm changes which could materially affect referral traffic to news, algorithm changes designed to affect ranking of news behind paywalls, and substantial changes to display and presentation of news, and advertising directly associated with news.

Digital platforms are also required to share with news media businesses information about data collected through users’ interactions with news on digital platforms. Examples include how long users spend on an article, and how many articles they consume in a certain time period. The platforms would also be required to publish proposals for how they would recognise original news content on their services.

Another element of the terms is around third-party comments. Under the ACCC’s code, news media businesses are expected to gain access to flexible user comment moderation tools, including an ability to turn off comments on individual stories they post to digital platforms. Importantly, the minimum standards also pave the way for news media businesses to prevent news content being included on any set digital platform.

The draft code’s release comes off the back of the ACCC’s initial Digital Platforms Inquiry, first established in late 2017 by the Federal Government to explore the potentially detrimental impact digital platform giants such as Google and Facebook are having on Australia’s media and advertising landscape.

Eighteen months later, the ACCC tabled its final inquiry report, finding digital platforms to be adversely impacting everything from media competition, monetisation and journalism quality, through to consumer data, privacy and digital industry competition. The report featured 23 wide-sweeping recommendations for how to address these concerns, spanning everything from competition law to consumer protection, media regulation and privacy laws.

In December last year, the Government responded to the ACCC’s report with a program of work including a voluntary code of conduct for negotiation around content between traditional news media organisations and the digital platforms. But by April, this had become a mandatory code, driven by accelerated concerns around the future of news media organisations in the face of the COVID-19 crisis.

The draft code of conduct comes two months after the ACCC opened up industry consultation on a concepts paper released in May. The regulatory watchdog said more than 40 submissions were received, including one from a group of 88 smaller media businesses.

A final round of consultation on the draft mandatory code will take place in August, with the code expected to be finalised shortly afterwards.

Responses to the news from media organisations were quick, loud and clear. News Corp executive chairman Australasia, Michael Miller, described it as a “watershed moment to benefit all Australians”.

“While other countries are talking about the tech giants' unfair and damaging behaviour, the Australian Government and the ACCC are taking world-first action. I congratulate them for their leadership,” Miller said. “The tech platforms' days of free-riding on other peoples' content are ending. They derive immense benefit from using news content created by others and it is time for them to stop denying this fundamental truth.

“The ACCC’s draft Code of Conduct is a watershed moment; it can force the platforms to play by the same rules other companies willingly follow and it ultimately means they will no longer be able to use their power to walk away from negotiations with news creators.”

Miller said he was looking forward to entering into negotiations with the platforms as soon as possible. 

“This code has the potential to benefit all Australians by securing the future for the people and companies who serve real communities with real news,” he said.  

A Nine spokesperson also saw the code as a way of evening up the balance of power.

“Nine welcomes the fact that the ACCC and the Government continue to push the agenda forward by recognising the importance of the regulatory and bargaining imbalances that exist between Australian media organisations and the dominant global digital platforms,” the statement read.

“We are confident that following this important step in the process we are positioned to achieve an outcome which will ensure significant long-term benefits to our news organisation.”

However, the applause was tempered by Greens spokesperson for media, Senator Sarah Hanson-Young, who criticised the ACCC for not extending the code of conduct to publicly funded media such as the ABC and SBS. “The Greens have been calling for big tech giants like Google and Facebook to be reined in for a long time. Today’s progress towards levelling the playing field between big tech and Australian media is welcome,” she said.   “But the devil is in the detail of this plan. The proposal to exclude the public broadcasters from bargaining arrangements and remuneration means Google and Facebook will be able to keep using taxpayer-funded journalism for free.

“It seems it’s okay for tech giants to rip journalism from the ABC and SBS for free, but if it’s Murdoch’s content then they have to pay,” she said. “Australian taxpayers shouldn’t have to prop up the profits of multinational tech giants that barely pay any tax here. Senator Hanson-Young noted the ABC’s recent reporting during the bushfire crisis and COVID-19 pandemic as a vital source of information for the community that shouldn’t be available for free to tech giants.

“How the proposed code will benefit smaller players in the Australian media landscape must be looked at more closely or there is a real risk of a deepening crisis for regional media outlets and small and independent publishers,” she added.

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