How Google and Facebook could pay for news: Competition watchdog sets out options for publishers, including a ‘collective boycott’

The competition watchdog has laid out potential frameworks and models which would enable news publishers to be compensated by the likes of Facebook and Google for the use of their content.

A concepts paper released this morning sets out various potential methods for levelling the playing field between local publishers and the global tech giants.

Perhaps the most radical potential course of action put forward by the Australian Competition and Consumer Commission (ACCC) is a ‘collective boycott’ which “may encourage each of Google and Facebook to offer news media businesses more appropriate remuneration for the use of their content”.

Google and Facebook are under the microscope 

This, however, relies on the big publishers being involved and sticking to their guns.

“A level of compulsory participation in this collective boycott is likely necessary for this mechanism to be effective, as without the participation of all (or at least a majority) of prominent news media businesses, each platform may circumvent the collective boycott by reaching agreements individually with one or two large publishers, undermining the bargaining power of the remaining group,” the paper conceded.

It did note as well the damaging effects this could have on the publishers themselves and consumers seeking news and information.

The ACCC reiterated that mandatory news media bargaining code – which was announced by Treasurer Josh Frydenberg last month – is about levelling the playing field.

“The aim of the code is to address the bargaining power imbalance by facilitating commercials negotiators that will allow news media businesses to achieve outcomes consistent with those that would be achieved in the absence of the bargaining power imbalance,” the concepts paper said.

A less dramatic suggestion put forward in the paper is for news media businesses to come together to allow for collective bargaining.

The ACCC is seeking feedback from stakeholders 

Whilst this would somewhat level the playing field, and give publishers more might against Google and Facebook, the watchdog conceded this approach also had its flaws.

“Given the diversity of the Australian news media industry, including the wide range of business models and funding mechanisms employed by these businesses, and the varying approaches they take to distributing news through each of Google and Facebook, a collective bargaining approach may not meet the commercial needs of some news media businesses,” the issues paper said.

It also noted collective bargaining can be anti-competitive and there needs to be a public benefit to justify its use.

Instead, collective licensing or fee arrangements could be pursued, which would have fixed fees for the use of news content. This would not change local copyright laws, the ACCC said.

A fourth suggestion put forward in the paper is bilateral negotiation, mediation or arbitration, with the ACCC seeking views on whether the code should be silent on how negotiations are conducted , or prescriptive about how they take place. In addition, the watchdog is weighing up whether to require the parties negotiate “in good faith”, and if it should put a time limit on negotiations.

It noted that the walled-gardens of the digital giants could make it difficult for publishers to negotiate, as the information they require may not be readily available.

“Any bargaining framework set out in the bargaining code may also be supported by mechanisms addressing information asymmetries between the parties, such as information asymmetries regarding the value that Facebook and Google derive from the availability of news on digital platforms. In particular, it is currently very difficult for news media businesses to ascertain the value (especially the indirect value) that each of Google and Facebook derive from the use of news on their services,” the paper explained.

“The availability of this information may in itself place news media businesses in a stronger bargaining position when negotiating with each of Google and Facebook,” it said, noting that calculating the indirect value that news provides is likely to be “highly complex and contestable”.

The competition watchdog is also seeking feedback on if mediation or arbitration is the best way forward. In particular, it wanted feedback and suggestions to assist in the identification and potential appointment of an arbitrator that is independent, has necessary information-gathering powers, and has experience in resolving disputes through arbitration.

In addition, the paper explored whether the digital giants should share consumer data with news publishers.

“As noted in the DPI Final Report, consumers would not expect a news media business to have access to their broader browsing history, search queries or navigational history as a result of simply visiting the news media business’ website,” the ACCC said.

“However, as digital platforms obtain a benefit from the data they collect due to users’ interactions with news content published or distributed on their services, it may be reasonable for digital platforms to share this data with relevant news media businesses.”

For many publishers, however, the concept of ‘You don’t know what you don’t know’ factors into their inability to negotiate with the tech giants here. As the ACCC pointed out, the publishers don’t even know what to look for, or what to ask for.

“The majority of large news media businesses and some smaller digital natives have raised access to user data as an important issue to be covered in a bargaining code. However, some smaller news media businesses, including local and regional publishers, have put less emphasis on addressing data sharing through the code. Other news media organisations have provided general feedback that they would like access to more user data from Google and Facebook, but most have indicated that they do not fully understand the extent and nature of the data that Google and Facebook hold on users’ movement between digital platforms and news media businesses’ websites, and do not know what types of data would be valuable for them to request.”

The paper also explores how the tech giants could notify publishers about algorithm changes in advance, the treatment of paywalled content, and the prioritisation of original news content.

The ACCC is seeking feedback on its suggestions, with feedback due by 5 June.


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