Industry responds to mandatory code forcing Facebook and Google to pay for content

Treasurer Josh Frydenberg’s announcement that the previously voluntary Australian Competition and Consumer Commission (ACCC) code will now be mandatory, seeing Facebook and Google forced to pay for news, has sent shockwaves across the industry.

The decision was made amidst a failure to create a voluntary code, with Frydenberg saying ‘insufficient progress’ had led to the mandatory ruling.

Frydenberg said the code will attempt to “level the playing field”

In a statement from a Google spokesperson, the tech giant said it was already working with publishers and would continue to do so in light of the new announcement.

“We’ve worked for many years to be a collaborative partner to the news industry, helping them grow their businesses through ads and subscription services and increase audiences by driving valuable traffic. Since February, we have engaged with more than 25 Australian publishers to get their input on a voluntary code and worked to the timetable and process set out by the ACCC,” said the spokesperson.

“We have sought to work constructively with industry, the ACCC and Government to develop a Code of Conduct, and we will continue to do so in the revised process set out by the Government today.”

Google’s comment echoed that of Will Easton, managing director of Facebook Australia and New Zealand. Easton also said it had already put millions of dollars into helping publishers and was ‘disappointed’ by the new ruling.

The tech platforms claim they have already provided value to publishers and were already working with media companies to improve this relationship. Google currently doesn’t pay publishers for story clicks due to its policy around paying only for advertising – something its says helps build trust with consumers.

Frydenberg’s announcement about the mandatory code did not include specifics as to how much Facebook and Google will be expected to pay, but did say the partnership would attempt to force Google to share more information around its algorithms.

According to the ACCC’s own estimates, for every $100 spent within Australia’s now-dominant digital advertising space, $47 goes to Google and $21 to Facebook, leaving the remainder to be spent across all other Australian websites.

Michael Miller_M360 2018

Miller has welcomed the decision to force Facebook and Google to pay for news

Nine’s CEO Hugh Marks and News Corp Australia’s chief executive Michael Miller both voiced their support of the decision, saying it’s time the big platforms take some responsibility for the hold they have over the Australian publishing industry.

Seven West Media CEO James Warburton also voiced his support of the code, calling it a ‘welcome move’.

“This is a welcome move from the Australian Government – not only to act, but to lead internationally on this critical issue,” Warburton said.

“The media industry is dependent on the value of its content being recognised by all users – foreign digital platforms in particular. In the past month our news content alone has reached millions of Australians – it’s only right when this is accessed via third party platforms its creators are fairly compensated.

“We fully embrace the opportunity to work closely with the government and the ACCC to implement this long-awaited action,” he said.

ViacomCBS Australia and New Zealand chief content officer and EVP, Beverley McGarvey, said she hopes the decision will inspire some ‘meaningful discussions’.

“Having the ACCC develop the Code(s) was always the best option as they are the experts in ensuring a level playing field in commercial bargaining environments. We look forward to meaningful discussions with the competition regulator and the Government in the weeks ahead,” said McGarvey.

McGarvey supports the government’s decision and hopes the relationship between publishers and tech platforms can be improved by the code

“It’s important to remember that digital platforms have been benefitting from all of our program-related content for years so for the Code to be truly meaningful it needs to cover all premium content developed by a media company, not just news.”

Several of the publishers have partnered with the big tech platforms on a number of projects, including a number of Facebook Watch news partnerships. But the relationship has always been a contentious one, with emotions spiked during the ACCC’s Digital Platform Inquiry.

The 18-month investigation resulted in a 623-page report released in 2019 by the watchdog. The code was one of the recommendations that followed the report, which has led into a further five-year inquiry and a separate ad tech investigation.

Commercial Radio Australia CEO Joan Warner said she hopes the mandatory ruling will change the balance of power between the media industry and the tech giants.

“We welcome the Government’s move to redress the power imbalance between digital platforms and Australian media. We will continue to work constructively with all parties,” said Warner.

The industry’s union, the Media, Entertainment and Arts Alliance (MEAA) said the decision will go some way towards providing a sustainable future for public interest journalism in Australia.

Over the last few weeks, enhanced by the coronavirus (COVID-19) pandemic, the industry’s problems have been put under a microscope. A number of regional titles have been forced to close for the foreseeable future and a number of support measures have been announced to try and end the suffering. It’s thought that more support from the digital platforms could help the industry build a stronger foundation for itself and support the delivery of important news.

MEAA first proposed a levy on aggregators in its July 2017 submission to the Senate inquiry into the future of public interest journalism and again in 2018 during the Australian Competition & Consumer Commission’s inquiry into digital platforms.

The digital platforms have been growing while publishers suffer says the MEAA

MEAA Media federal president Marcus Strom said the industry has suffered while the tech platforms grew.

“The government has realised that voluntary codes don’t work when there is a bargaining power imbalance. Google and Facebook have in part grown off the back of news content. The creators of that content, news media outlets, have suffered while still producing vital public interest journalism,” said Strom.

“Google and Facebook will now be required to negotiate responsibly with news media and start paying for the content they have exploited for free.

“MEAA supports the development of a mandatory code and we will scrutinise the draft legislation carefully. MEAA intends to monitor the distribution of the funds which we believe should support emerging and future journalism, not just existing media outlets,” Strom said.

MEAA’s thoughts were supported by those of the Public Interest Journalism Initiative (PIJI). Chairman Professory Allan Fels, a former chairman of the ACCC, said the decision was the right one for the future of news reporting.

“If executed correctly, this has the potential to level the playing field for news organisations and others who are producing content,” said Fels.

“We feel strongly that content creators must be compensated for their work as a basic principle of the value of public interest reporting that is integral to any transparent, working democracy.

“The commercial instability observed across the industry in the past ten years has accelerated sharply with large scale closures and job losses in response to the COVID-19 emergency and this is now a matter of national urgency.

“It is encouraging to see the Federal Government recognising the need for long term reform in the media industry and hastening the timeframe for structural change.”


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