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Summary

 

Australian Competition & Consumer CommissionOn July 31, 2020, the Australian Competition and Consumer Commission (ACCC) published its draft code for a mandatory bargaining process between news businesses and digital platforms for fair payment for news content. The draft code stems from the ACCC’s Digital Platforms Inquiry, which found a “power imbalance” between Australian news publishers and Google and Facebook. 

 

The new code is designed to acknowledge the benefit digital platforms derive from content creators

 

The ACCC’s 2019 Digital Platforms Inquiry, which examined the impact of search engines and social platforms on the media and advertising market, recommended a code of conduct for commercial negotiations between news media organizations and the two tech giants Google and Facebook. While the proposed code initially covers only Google and Facebook, it could be expanded to cover other digital platforms if necessary.

The code allows news media publishers to notify Google or Facebook of their intention to negotiate with them for payment for content. Google and Facebook would be given three months to negotiate in good faith with the news publishers. An independent arbitrator would decide on the most reasonable offer if a consensus between the two parties is not reached.

In addition, the platforms must also allow easier moderation of comments on news articles and give news publishers the ability to opt into or out of having a particular news story on an individual service (i.e., allow it on Google Search but not Google News). Platforms must also give news publishers 28 days’ notice of any changes to algorithms that are likely to affect traffic to the publishers’ websites, the ranking of articles that appear behind paywalls, the way that news is shown on the platform, or the way advertising is displayed with news articles. And they must share the details of what data—although not the data itself—they collect on users interacting with news content.

News media organizations with revenue of more than AUD$150,000 will be eligible to use the code, except for broadcasters ABC and SBS since they do not rely on advertising revenue. Breaches of the code will result in financial penalties. An infringement notice will set the firms back AUD$133,200, while a court could order a fine where the maximum is the higher of AUD$10m, 10% of Australian turnover in the last 12 months, or 300% of the benefit obtained by any breach.

 

The code could backfire if Facebook and Google simply refuse to link to Australian news publishers

 

Facebook has previously said that “news does not drive significant long-term commercial value” but that it would follow “sensible regulatory frameworks for digital news.” Given this statement, Facebook could simply respond to the ACCC’s move to regulate payment for news content by turning off the ability for Facebook users or publishers to share links from news publishers in Australia without risking revenue.

Google also said that it generated very little revenue from Australian news and accused news publishers of using “inaccurate numbers” in the consultation process. Mel Silva, MD of Google Australia, said in a blog post that Google sends traffic worth AUD$218m to Australian news publishers every year. Silva called the code a “heavy handed intervention” and said that it would “impact the service we can deliver to Australians.”

It will not be as easy for Google to simply turn off Google News in Australia, as it did in Spain when it faced having to pay news publishers to use snippets of articles, because the proposed Australian code also covers Google’s Search and Discover products. So, in order to avoid non-compliance with the code, Google would have to block news publisher websites from being picked up in its search products. This would harm the Google Search and Google Discover user experience in Australia. Of course, Google could gamble that removing Australian news websites from its search results would result in consumer pressure on the government to remove the code.

The code is in a consultation period until the end of August 2020 and will then be debated in parliament. If passed, it will be reviewed after a year. But with Facebook and Google both protesting the new code and news media publishers having spent a long time lobbying for it, the battle for control over the ability to monetize Australian news media on social platforms will no doubt rumble on for some time.

 

Appendix

Further reading

Social Media Tracker: 2H19, CES001-000072 (February 2020)

Social Media Tracker: 2H19 Report, CES001-000075 (March 2020)

Social Media Forecast: 2019-2024, CES001-000070 (December 2019)

 

Author

Charlotte Palfrey, Senior Analyst, Advanced Messaging and Communications

[email protected]

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