Government to amend code as Google closes in on further News Showcase deals

The Australian Government will amend the News Media Bargaining Code this week to ensure Google and Facebook would make lump sum payments under the proposed law, rather than paying for clicks.

The announcement comes just days after Google struck its biggest News Showcase deal yet with Seven, while an article in The Sydney Morning Herald today claims that Nine has signed a letter of intent with Google for a five year multimillion News Showcase deal. With Google’s “worst case scenario” threat to pull its search function from the market still looming,  those licensing agreements can reportedly be terminated if the code remained unchanged.

In a joint statement, Treasurer Josh Frydenberg and Communications Minister Paul Fletcher confirmed the “technical amendments” will “enhance the way [the code] operates”.

The changes will: adjust the requirement of platforms to give publishers notice of algorithm changes, clarify that payments would be lump sum, spell out the Australian Competition and Consumer Commission’s role during arbitration, and ensure existing contracts are not interfered with.

Frydenberg and Fletcher added that the Google News Showcase deals – struck with publishers including Seven, Australian Community Media, Private Media, Schwartz Media, and The Conversation – are “encouraging”, and reiterated that Treasury will review the code after it has operated for a year.

“The code creates a framework for parties to reach commercial agreements so that news media businesses are fairly remunerated for the content they generate,” the statement read.

“A central feature of the code is that it encourages parties to undertake commercial negotiations outside the code.

“It is encouraging to see recent reports that news media businesses and digital platforms are now reaching commercial agreements, against the backdrop of the code being introduced into parliament on 9 December 2020 and receiving the backing of the Senate Economics Legislation Committee.”

Two days ago, Google’s director of government affairs and public policy, Lucinda Longcroft, said in response to the senate committee’s report that, “we remain committed to a workable code–-the concerns that we, and others, have been raising consistently are about specific aspects of the code”.

The company is continuing to negotiate with other big media players, while Seven said its deal – which will become formal once a long form agreement is entered to within 30 days – is a fair one.

“We’ve had a very, very proactive relationship with Google for a long period of time. And we’ve been able to negotiate an outcome that we’re both happy with and that we feel fairly remunerates us in terms of what we create,” CEO James Warburton told Mumbrella this week.

“We’ve been able to get that deal done … It’s a deal that we wanted to do.”


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