Australian media to bargain with tech giants for payment if new ACCC mandatory code is adopted

Australian news publishers will be able to bargain with Google and Facebook for fair payment for news content if the mandatory code released today by the industry watchdog is adopted.

The Australian Competition and Consumer Commission (ACCC)’s draft mandatory code will require the tech giants to take part in negotiations on fair payment for content, with the negotiations to be concluded within three months or else enter arbitration.

The draft code is aimed at addressing acute bargaining power imbalances between Australian news businesses and Google and Facebook, including through a binding “final offer” arbitration process. The code also lays out guidelines for publishers to be warned and consulted if the tech platforms plan to make changes to their algorithms likely to materially affect referral traffic to news. The platforms must also be clear with publishers about the data they collect through users’ interactions with news on digital platforms.

The process will see news businesses and digital platforms enter a formal three-month negotiation and mediation process, sparked by the publisher, with an independent arbitrator choosing the result within 45 days.

The code comes as a result of the 18-month Digital Platform Inquiry and the resulting decision by the Federal Government that the ACCC create a guideline for a payment code between tech platforms and digital publishers.

The focus is on resolving the negotiations in the quickest and most effective way possible, according to the ACCC. Deals on payment could be reached within six months of the code coming into effect if arbitration is required.

The draft code would also allow groups of media businesses to collectively negotiate with the platforms. This could include, for example, regional and community mastheads.

The new bargaining process [click to enlarge]

ACCC chair Rod Sims said the relationship between the publishers and the tech platforms speaks to a bargaining system.

“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,” 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.”

While the draft code would initially apply only to Google and Facebook, other digital platforms may be added if they attain a bargaining power imbalance with Australian news media businesses in the future.

Treasurer Josh Frydenberg said the existing framework is outdated and needed to be reviewed.

“As the technology has developed and as the power, the wealth, the influence of these digital platforms, namely Google and Facebook, has grown, our regulatory framework has not kept up,” Frydenberg said this morning.

“And as a result, there is a very unequal bargaining position between Australian news media businesses that produce original content and the digital platforms.”

Google, Facebook and a number of other tech companies and publishers took part in the consultation process for the code, with more than 40 submissions received by the ACCC.

“We recognise the contributions of many parties to this process, including Google, Facebook and a diverse range of Australian news media businesses,” Sims said.

“We look forward to further discussions as we finalise the details of this draft code.”

Further consultation on the draft mandatory code will take place during August, ahead of the code being finalised shortly after.

“We recognise that the bargaining power imbalance between news media and the digital platforms is particularly acute for smaller media businesses, including regional and rural media,” Sims said.

“We note that 88 smaller media businesses teamed up to submit a joint submission as part of the process of developing the code. Under our plan, these businesses could again work together to negotiate with the platforms over fair payment for their content.

“News content brings significant benefits to the digital platforms, far beyond the limited direct revenue generated from advertising shown against a news item. News media businesses should be paid a fair amount in return for these benefits.

“We have ensured that the cost of producing journalism would be taken into account in arbitration. However, the arbitrator is also required to consider whether the payment proposals from news media businesses place an undue financial burden on the digital platforms,” Sims said.

The code would also address some of the other concerns publishers have when dealing with the tech platforms, including a set of minimum standards which would be put in place. The digital platforms would be required to give news media businesses 28 days notice if algorithm changes are likely to materially affect referral traffic to news, or impact the ranking of news behind paywalls. Publishers would also have to be informed of any substantial changes to the display and presentation of news, and advertising directly associated with news.

In addition, the platforms would need to give news media businesses clear information about the data they collect through users’ interactions with news on digital platforms; for example how long users spend on an article, how many articles they consume in a certain time period, and other information about user engagement with news content across digital platform services.

The platforms would also be required to publish proposals for how they would recognise original news content on their services. They would also need to provide news media businesses with flexible user comment moderation tools, including an ability to “turn off” comments on individual stories they post to digital platforms.

The minimum standards would also allow news media businesses to prevent their news content being included on any individual digital platform service.

Breaches of these standards would be subject to potential enforcement action by the ACCC.

In terms of which news media businesses are eligible under the code, the Australian Communications and Media Authority (ACMA) would decide this with companies only eligible if the online news content they produce investigates and explains issues of public significance for Australians; issues that engage Australians in public debate and inform democratic decision-making; or issues relating to community and local events.

In addition, they must adhere to minimum levels of professional editorial standards, and maintain a suitable degree of editorial independence; operate in Australia for the main purpose of serving Australian audiences; and generate revenue of more than $150,000 per

The code is not intended to capture any non-news media content, such as drama, reality television, entertainment content or sports broadcasting.


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