Australia is making Google and Facebook pay for news: what difference will the code make?
"Australia Moves to Force Google and Facebook to Compensate Media Outlets "
The government’s legislation to force the tech giants to negotiate with news media companies is being closely watched around the world
Amanda Meade
Wed 9 Dec 2020 15.10 AEDT Last modified on Wed 9 Dec 2020 16.53 AEDT
Facebook and Google will have to pay to use content from news media organisations under the Australian government’s new code. Photograph: Denis Charlet/AFP/Getty Images
The law has been designed to address the loss of advertising revenue .. https://www.theguardian.com/media/2020/oct/23/google-facebook-and-youtube-found-to-make-up-more-than-80-of-australian-digital-advertising .. from traditional media companies to the digital behemoths: for every $100 of online advertising spend, $53 goes to Google, $28 to Facebook and $19 to everyone else. The loss of advertising revenue has been partially offset by subscriptions but it hasn’t been enough to stem the cuts to newsrooms, journalists leaving the industry and media outlets going broke and closing. Meanwhile Google and Facebook are doing very well: Google made $4.3bn in advertising revenue in Australia last year and Facebook made $0.7bn, according to documents filed with the Australian Securities and Investments Commission.
Newspapers say Google makes money from news and analysis provided by media organisations, and users would find Google and Facebook .. https://www.theguardian.com/technology/facebook .. much less helpful if no news appeared on their feeds or in their search results.
The code aims to ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia.
Why has it taken so long?
It’s been three years since the government asked the competition regulator, the Australian Consumer and Competition Commission, to inquire into the impact of Facebook and Google .. https://www.theguardian.com/technology/google .. on the state of competition in media and advertising.
Its 18-month inquiry found a bargaining power imbalance between news media organisations and the large digital platforms, and recommended that codes of conduct be negotiated to govern their commercial deals. The ACCC released a draft code and media companies and the platforms were asked to comment.
Was the proposed code welcomed?
The recommendation was welcomed by media companies and advocates of public interest journalism.
The prime minister stepped in and warned them against employing “coercion” in their opposition to his plans.
The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 was finally tabled by the treasurer, Josh Frydenberg, in the last sitting week of 2020.
How will the code work?
Media companies are encouraged to make commercial deals with Facebook and Google outside the code.
But the code gives them a framework to bargain and reach a binding agreement.
If they can’t agree, an arbiter will implement the “final offer arbitration” model to determine the level of remuneration.
The digital platforms will have to give the media 14 days’ advance notice of deliberate algorithm changes that affect news media businesses.
To keep bargaining costs low for smaller companies, the digital platforms can make standard offers, or media companies can bargain collectively.
Can Google and Facebook just refuse to negotiate?
If they do, they will pay a penalty of $10m, or 10% of annual Australian turnover, or three times the benefit obtained, whichever is the greater.
But the stiff penalty only applies if they breach the key provisions of failing to negotiate or take part in arbitration in good faith; failing to comply with an arbitration decision; or engaging in retaliatory action against news media companies.
Which media companies will be eligible for payments?
While News Corp Australia has campaigned aggressively for the code, it has the broad support of the industry including Guardian Australia .. https://www.theguardian.com/media/guardian-australia . Nine Entertainment, publishers of the Sydney Morning Herald and the Age, are on board as is Seven West Media, Australian Community Media, regional and small publishers.
Has the code been watered down after lobbying by big tech?
Not really. The ACCC chair, Rod Sims, said he was pleased to see the final legislation and he supported what was tabled in parliament. Facebook successfully argued that Instagram should not be included in the code, and it also acknowledges that Google sends traffic to media companies.
“The aim of the code is to address the uneven bargaining position between Australian news media businesses and the big digital platforms who have clear market power,” Sims said.
“It would be good to see commercial agreements between platforms and news media businesses taking place outside the code process. Arbitration is a last resort, and exists to strengthen the media businesses’ bargaining position.
“The ACCC has been fully involved in the preparation of and consultation on the legislation and supports what has now been introduced.”
Seems Trump wasn't overly thrilled with the proposal.
White House watching Australia on Facebook, Google laws Jacob Greber United States correspondent Sep 6, 2020 – 10.09am [...] Google's Australian head of government relations Lucinda Longcroft, told The Financial Times last week that Washington holds concerns about the code. P - "We understand that the US government is concerned about the way in which this initiative, the draft code is framed – targeted seemingly in a discriminatory way against two companies which are American." https://www.afr.com/world/north-america/white-house-watching-australia-facebook-google-laws-20200905-p55smz
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