Frydenberg introduces News Media Bargaining Code to parliament, questions of effectiveness follow

Treasurer Josh Frydenberg finally introduced the News Media and Digital Platforms Mandatory Bargaining Code bill to parliament yesterday, months after news companies first expected to start receiving payments from the digital platforms.

In his second reading speech, Frydenberg said the bill “represents a major reform—an historic reform—a world first, where the eyes of the world will be on what is occurring here in Australia”.

Frydenberg said the code will ‘level the playing field’

“We are not seeking to protect traditional media companies from the rigour of competition or, indeed, technological disruption, which we know benefit consumers,” he said.

“Rather, we are seeking to create a level playing field where market power is not misused and there is appropriate compensation for the production of original news content.”

The treasurer also drew attention to the fact that “public interest journalism plays an important role in our society”, despite the ABC being forced to make hundreds of redundancies in response to a $41m budget shortfall. The national broadcaster has continued to defend its assertions that its real funding, taking into account inflation, has been slashed, in contrast to Communication Minister Paul Fletcher’s arguments that the ABC’s budget has increased.

“It is critical to the functioning of our democracy,” Frydenberg said of such public interest reporting. “This role can only be fulfilled by a strong, diverse and sustainable Australian news media sector.”

The mandatory code makes Australia the first country in the world to force Facebook and Google to pay for news, and was drafted after efforts to broker a voluntary code fell short.

Under the code, the Australian Communications and Media Authority (ACMA) will be tasked with deciding whether a news business is eligible to bargain with the digital platforms. If that bargaining process is unsuccessful after three months of attempts, the news company can take the platform to an arbitration process. 

That process will involve both the publisher and platform submitting a final remuneration offer, and a panel of arbiters making a final decision. However, publishers will only be able to take a platform to arbitration once every two years.

After a year of operation, the Treasury will review the code to examine its effectiveness. But the code’s efficacy is already being questioned. While News Corp and Seven welcomed the code being tabled to parliament, Nine noted that “the continued concessions to the digital platforms only entrenches both their monopoly power and the significantly unfair imbalance in regulation”.

“These companies pay little or no tax, contribute little and often negatively to our culture, and employ no creative teams,” a spokesperson said.

“The notion they receive regulatory recognition with the so called two way value exchange, for something they already have a commercial model to monetise, seriously undermines the fundamental problem the ACCC identified in the beginning of this process – that is an abuse of monopoly power which fundamentally harms the future sustainability of media in Australia.”

Thinkerbell’s general manager of media, Ben Shepherd, also doubts the code will lead to the result news companies want and need.

“It’s hard to see money changing hands from platforms to publishers with the code as presented to parliament,” he told Mumbrella.

“Two-way bargaining will allow the platforms rightly to demonstrate their value to the publishers, which will make determining the net benefit of news to these platforms very difficult to make a judgement on. It will create such complex valuations and determinations around cost [and] benefit and the value of referrals that it’s unlikely to create any news roles aside legal ones at both the publishers and platforms to deal with the issue.

“If the government is so concerned with the state of local news and journalism, a better way to directly help fund this would be to mandate a higher percentage of government advertising in local news sources and community media, and/or locally owned media companies. Collectively the Federal Government and the state governments invest over $500 million in media annually … a change in allocation to community and local news outlet could create significant jobs and allow this sector to benefit.”

Minister Fletcher, meanwhile, said the bill follows “extensive consultation” with stakeholders, and said it is both “a competition policy issue and a media policy issue”.

“If the enormous market power of the digital platforms were to drive media businesses out of operation and in turn compromise the diversity and sustainability of the Australian media sector, that would be a bad outcome for our nation and our democracy,” Fletcher said in a statement.

“The draft to be introduced into parliament this week has been developed following extensive consultation, and builds on a comprehensive public policy process going back to 2017.

“There will be an opportunity for further consultation, with a Senate Committee to examine the draft Code before it is finally voted upon by the Parliament.”

However, the Labor Party called attention to the “disappointing … uncertainty and delay”, with Shadow Communications Minister Michelle Rowland commenting yesterday: “While Labor welcomes the introduction of the code to parliament today, the government’s repeated assertions that it would implement the scheme this year have proved false.”

In his speech, Frydenberg maintained that the code is a “world-leading initiative” which will improve an eroding media industry. This year alone, due to the impacts of the pandemic, hundreds of newspapers have been shuttered, 10 Daily was axed, and Buzzfeed cut its Australian news team.

“It’s a key part of the government’s strategy to ensure that the Australian economy is able to take full advantage of the benefits of digital technology, supported by appropriate regulation to protect key elements of Australian society,” Frydenberg explained. “One such key element is a strong and sustainable Australian news media landscape.”

Google was contacted for comment, while Facebook noted it is reviewing the bill.


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