Nine hits out at ‘market power’ of Google & Facebook, warns of cut backs to content

Global digital content platforms like Facebook and Google were in the crosshairs of Nine during its 2020 AGM, specifically their unregulated access to premium content produced by others.

Chairman Peter Costello and CEO Hugh Marks spoke in-depth about the impact of COVID-19 and the challenges it has posed this year, but each singled out the negative impact of Facebook and Google on Australian businesses, creators, and consumers.

Nine chairman Peter Costello

During his address, Costello called the market power of the two platforms “the other great challenge in this industry”.

“They are not subject to the content rules that apply to free-to-air broadcasters in the Australia market,” he said, before going on to criticise the platforms for contributing little to Australia’s unemployment rates during the pandemic.

Costello cited the fact that Nine has invested $1 billion in premium content in FY20, content that is being used by large global companies to generate revenue and build further the platforms.

“They are able to use premium content we produce to attract audiences in the premium market,” he said. “They do not pay for it at a rate that fairly shares the cost of making it or fairly shares the value they get from it.”

He welcomed the ACCC’s draft mandatory code, designed to facilitate fair bargaining between Facebook, Google and media businesses over their use of news content, but stressed that the details in the final version will be important.

“Local Australian production will benefit, but we believe the ultimate beneficiaries will be Australian consumers,” Costello said.

“If we are not adequately compensated, simply, it will become uncommercial to make all the premium content we now make.”


In its AGM last month, the Australian Competition and Consumer Commission chair Rod Sims said implementing the code remains one of the body’s top priorities for the next financial year, and that the final version will cover elements including data sharing, ranking and display of news content, and monetisation and sharing of revenue generated from news.

It will also “establish appropriate enforcement, penalty and binding dispute resolution mechanisms”.

Nine CEO Hugh Marks echoed Costello’s comments as he spoke about Nine’s publishing arm, in particular its metro media business, which he said “is becoming increasingly digital and is not far from the tipping point where digital will outweigh print”’.

Reader-based revenue already accounts for 60% of total revenue, Marks said, but key to the future of Nine’s publishing business is “resolution of Nine’s relationship with the global digital platforms enquiry”.

“We are grateful the ACCC and government have finally recognised the significant imbalances that have formed over the years between the publishers and digital platforms, and were prepared to take action,” he added.

“We are feeling increasingly positive about the potential outcome and encourage the government to continue to act decisively and proactively to deliver the much-needed reform in a timely manner.”

Google Australia director of government affairs and public policy, Lucinda Longcroft, responded to the statements: “Mr Costello’s comments are demonstrably incorrect. Google invested approximately $1 billion in Australia last year, while our search advertising and productivity platforms generated more than $35 billion in business benefits for more than one million Australian businesses.

“During COVID-19 we’ve helped more than 1.3 million Australian businesses stay connected with their customers. We support 117,000 jobs in Australia, including 1,800 jobs within Google and 116,200 across the wider economy.”

She added that Google does not “use news content” but rather they link users to it. “Links are part of what makes the web work. Every year Google Search sends billions of free clicks to Australian news publishers that they can monetise and turn into subscribers — traffic that was valued at $218 million in 2018.

“In contrast, in 2018 news-seeking queries accounted for just over one percent of total queries on Google Search in Australia, and clicks on ads in response to news-seeking queries generated only $10 million in revenue, not profit, for Google.”

Facebook declined to provide a response to Mumbrella.


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