ACCC’s Rod Sims says Facebook needs time for news payment deals

The country’s competition tsar, Rod Sims, has said he is happy to give Facebook more time to cement “pretty hectic” and “rugged” deals with news businesses, amid reports the social media platform has been stalling or not negotiating in good faith.

Presenting to senators at Friday’s media diversity inquiry hearing, the chair of the Australian Competition and Consumer Commission (ACCC) noted that while the news media bargaining code has “improve[d] the bargaining power of the news media businesses”, that “doesn’t mean that Facebook will just agree to whatever that the news media business wants”.

Sims presenting at the inquiry

“Obviously now they [news businesses] can stand up to Facebook, whereas they just clearly, absolutely could not before,” Sims said.

“The sense I’m getting is that negotiations, in many respects, are going on. But they’re quite rugged.

“I think give it time. The deals I’ve been at the peripheries at, because obviously we’re not involved in those, but I occasionally I ring up a few people, and sometimes they’re pretty hectic. They take a lot of time.”

Senator Sarah Hanson-Young, the committee’s chair, clarified that this means Sims is “not opposed to using the stick”, meaning the ACCC would take action should Facebook not strike agreements. Sims agreed that such action would “logically follow” if the stalemate continues.

The two hurdles for the digital platforms to clear include an evening out of bargaining power, which has been remedied by the code, and actually entering into deals, he explained.

“If you haven’t done a deal with the top three players [News Corp, Nine, and the ABC], and I would add personally in there Australian Community Media and players like that, then I don’t think you’ve jumped that hurdle.”

His comments preceded today’s reports out of Nine’s The Sydney Morning Herald and News Corp’s The Australian that both businesses are very close to clinching deals with Facebook. Seven, Schwartz Media, Private Media, and Solstice Media have all got arrangements with the platform, which followed a frenzy of dealmaking between news businesses, including the major players, and Google.

Sims expressed hope Google would also sign a contract with the ABC, and added that “the fact that Google did them so quickly, I think reflected that they were more advanced. Facebook is coming from a bit of a back marker. Let’s see how it plays out”.

The Guardian’s managing director, Dan Stinton, who also appeared at Friday’s hearing alongside editor Lenore Taylor, re-emphasised that the negotiating process is “very complicated”.

Stinton said the process is complex

The inquiry was established after former Primer Minister Kevin Rudd called for a Royal Commission into News Corp in a petition which attracted 500,000 signatures. He fronted the inquiry last month, telling the senators that he only stopped being fearful of Rupert Murdoch’s News Corp once he left office.

On Friday, former News Corp photographer Anna Rogers presented to the committee before Sims, detailing what she called a “toxic” and “sexist” culture in which she was instructed not to photograph “pigs in lipstick”.

On News Corp’s alleged market dominance, Sims noted that the ACCC would have rejected a bid from News Corp to buy Fairfax before the Nine merger was locked in, or an offer for Ten.

“At some stage, [there were] thoughts that News might want to take over Ten. And again, we probably would have opposed that too, because you’ve got Sky and Ten. We’d have said ‘Well, that’s a decrease in competition in the television market’. Now we never got to assess it in detail.”

The ACCC would have rejected a merger between News Corp and Fairfax

However, the competition watchdog’s legal standing for rejecting such proposals is unclear. According to Sims, the merger laws “do need to be improved” and are “not adequate”.

“When Fairfax was up for sale, I said publicly, and some would argue it’s not appropriate for me to do what I’m about to say that I did, which was to say quite publicly that we would not allow News Limited to buy Fairfax,” he said.

“You might think that’s obvious, but I said that loudly and clearly to get the message out. Had News Corp wanted to buy Fairfax, and that went to court, I honestly don’t know whether we would have won or lost. That, by any definition, should never be allowed. It didn’t happen, it probably wasn’t even contemplated, but that’s where we could improve our merger laws.”

Sims was also quizzed on News Corp’s acquisition of APN, which was criticised by Rudd at the inquiry because it led to the shuttering of many of those papers.

“We looked at that very carefully, as you would expect … We judged that you aren’t sitting there deciding ‘Gosh, will I get the local newspaper or the Courier Mail today?’ You might buy both, but you wouldn’t think of them as substitutes,” he said of the ACCC’s green lighting of the deal.

“In our view, there wasn’t a competition issue there. Some might, with a different hat on, say ‘Well, the voice behind all of that is a common voice’. Now, whether that manifests itself when you’ve got the Courier Mail dealing with state and national news and the local newspapers dealing with local news or not, again I leave [it to] others to judge. That could be a diversity issue, which would be different from a competition issue.

“There was certainly a sense that APN was at risk of closing some of them anyway. There was just a question of fundamental viability. I don’t think we formed the view that News Limited just wanted to buy them and kill them, because, in a sense, the ones they closed were just local media … I think they just made a judgement of viability.”

The inquiry will continue next month.


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