The passage of the News Media Bargaining Code was an important first step in digital platform reform to address the monopoly power of Big Tech.
It is the product of an 18-month evidence-based inquiry by the ACCC which canvassed global efforts for regulation.
The ACCC recommended a range of reforms including:
- overhauling data privacy laws
- placing obligations on platforms to address misinformation and disinformation
- regulating the opaque ad-tech industry
- funding public broadcasting
- and creating tax incentives for philanthropic funding of journalism.
The Centre for Responsible Technology supports the Code as part of the broader package of reform to regulate the way Big Tech exercises its power in Australia.
1) What is the Code?
One of the ACCC’s core findings was that the digital advertising monopoly power of Big Tech had undermined the media business model by decoupling news from advertising.
It also found that news content provided both direct and indirect value to both Google search and Facebook.
The original recommendation from the ACCC was for the platforms and media companies to enter good faith commercial arrangements to value news.
Both Facebook and Google refused to enter these good faith negotiations and government moved to force negotiations.
The Code provides a legislative safety net under negotiations between Big Tech platforms and media companies.
It is designed to be available to any organisation meeting a broad definition of journalism and generating $150,000 in income.
That process is to be managed at arm’s length by ACMA.
Under the legislation, the Code lays out the way a dispute would be arbitrated (final best offer) and gives the Treasurer discretion to designate a platform to be subject to these provisions.
The Big Tech platforms were strongly opposed to be forced to pay for news – and both threatened to (and in Facebook’s case did) withdraw services in Australia.
The resolution of that stand-off was that both companies would secure deals for specialist News offering (Google Showcase and Facebook news) with media companies that were eligible to be under the Code and, if this were to occur the government would agree not to designate their primary platforms.
On one level these deals are a fig leaf – the platforms are paying above the odds to maintain the fiction that government is not regulating their primary platform.
But the primary objective of forcing the platforms to recognise the value of public interest journalism has been achieved.
Important to note:
- This is global first legislation – so it is difficult to be definitive in how it will work.
- The Treasurer retains the power to designate Google Search and Facebook into the code if the commercial deals are not finalised.
- The operation of the Code will be subject to a 12-month review.
2) Isn’t it true that the government blinked and Facebook won?
It is true that Facebook secured amendments that would extend the process before it is designated. There are valid concerns that a mediation process would give them extra power over smaller publishers. However, it is critical to note the legislation places a time limit on that process.
Facebook did not want this Code in law – and in fact had placed a ‘Poison Pill’ in earlier negotiations that would render them void if the Code become law. The Code is now law.
3) In not designating Facebook and Google isn't the government waving a white flag on regulation?
The Treasurer retains the threat of designation to the Code as leverage.
It is critical that the rest of the reform process – privacy, disinformation and ad-tech is taken just as seriously by the media and politicians.
4) Isn’t this just shakedown money for News Corp and Nine that will lead to further market concentration?
It is true that Nine and News Corp will receive significant payments. But, so will Guardian Australia and other smaller and newer players.
One of the problems with the advertising monopoly that the ACCC addresses was that it was already driving media concentration. News Corp’s dominance was a sign of the weakness of the rest of the industry.
If the Code and broader reform process works as the ACCC intended, there will be more media outlets with more sustainable business models.
That said, the power of News Corp is a relevant concern and should be subject to ongoing review and critique, which can only occur with a strong and vibrant media.
More money in the media is not going to make Rupert Murdoch either better or worse – more money in journalism will provide more journalists to scrutinise large corporations.
5) It’s all happening behind closed doors, how will we know how much is spent on journalism?
It is true these are commercial-in-confidence arrangements.
The Centre for Responsible Technology would like to see the ACCC require media companies to report back on how the commercial deals have continued or added to their production of news at the 12-month review.
6) Are small publishers are going to be left out, or subject to dud deals?
This is a valid concern that needs attention. Smaller publishers need to register with ACMA and meet the requirements. In the event they are not offered access to Showcase, the ACCC or ACMA needs to establish a collective bargaining process.
7) Will deals with Google Showcase and Facebook news make the media companies more reliant on the platforms to distribute their content?
This is a valid concern. This whole episode has shown our over-reliance on these platforms.
The risk here is that Showcase is more than a fig-leaf and becomes a primary entry point to news. It is incumbent on media companies to avoid this risk.
That’s why the Centre is working to rethink public digital infrastructure as a counterpoint to these big private platforms.
8) Does the new regime create an incentive for Google to prioritise some news sites (e.g. Sky News) over others in their search results?
This is a concern that needs to be addressed.
If true, it would appear to be anti-competitive and would be rightly scrutinised by the ACCC.
9) Can start-ups take advantage of this new regime?
The threshold for organisations is $150,000 annual revenue and the legislative definition of news journalism.
10) Can an entity that isn’t eligible restructure its business so that it is?
The threshold is so low that it is hard to see why this would be worth the effort.
11) Isn’t it true that existing media gets more from Google and Facebook than the other way around?
The claims the platforms make are focused on monetisation rather than value.
The ACCC Digital Platform report talks about direct and indirect benefit; whether or not Facebook and Google monetise news, it adds to the value of the network intrinsically.
Because of their monopoly advertising power, Google and Facebook have destroyed the media business models and that is a bad thing for democracy.
Any clicks and referrals to websites does not compensate for this monopoly power.
12) Wouldn’t a tax be better?
Maybe, but there isn’t going to be one in the foreseeable future and the pressure on media companies is immediate.
If there was a tax, and if Google and Facebook paid, and if it was hypothecated - money would still flow to NewsCorp and Nine proportionate to their size.
And it is the Morrison Government that would decide who got the money. The current model could result in a less political distribution.
The Bottom Line
These reforms will see somewhere around $250 million extra a year available for public interest journalism in Australia.
This will mean more journalists holding government and corporations to account and more journalists covering important local and civic issues.
The Code was never designed to solve the power of Big Tech and its problematic business models on its own. It is part of a broader digital platform reform agenda currently working its way through government:
- Real and enforceable citizens' rights over personal information
- Active obligations to manage disinformation and misinformation
- Cleaning up the poorly understood ad-tech industry
This is the start, not the end of the project to sensibly regulate Big Tech.
It is notable that elected representatives from across the political spectrum have recognised Big Tech’s power and have done their job to begin to regulate it.
The media has been understandably engaged in the News Media Bargaining Code, and the test will be whether the media can sustain its interest and enthusiasm for reforms that don’t deliver directly to their industry.
Australians have witnessed first-hand the power of Facebook and the contempt it holds for them in their hostile Australian news blackout, which also targeted government and civil society. Australians have also witnessed first-hand Google's initial bullying tactics.
The Centre for Responsible Technology wants all people to become more aware and more critical of the Big Tech platforms and their surveillance business models in order to begin imagining a future where society is less reliant on them.