An opportunity too important to miss
Australians need a strong and vibrant news media sector more than ever. Through the bushfires, floods and the COVID-19 pandemic, Australians have turned to local news agencies through radio, television and print media as their trusted source of information.
Australians also know that trusted local news sources are under threat. Many have closed, silencing local voices forever.
Global digital platforms need to care about the local media landscape. They should be concerned with ensuring the sustainability of the local news media sector.
Why? Because they benefit – enormously. But the financial ledger in the production of content is currently very one-sided.
ACCC says Google and Facebook should pay
The ACCC spent two years investigating the impact of Google and Facebook on
sustainability of the news media sector. He forensic examination of their relationships with news media companies and their impact on the advertising market.
ACCC’s groundbreaking digital platforms survey concluded that the decline over time of public service media in Australia was the result of declining advertising revenues from traditional media. But as the revenues of local news media companies declined, Google and Facebook’s ad revenues increased exponentially.
Australians can search for news on Google and share stories with family and friends on Facebook and Instagram in part thanks to investments by local media companies in quality journalism. Google and Facebook generate significant revenue by collecting data on these users and turning it into highly targeted advertising.
This makes news content extremely valuable for digital platforms. Yet Google and Facebook are currently not paying Australian media companies for this valuable content.
Australian media companies cannot avoid using digital platforms to reach news consumers.
Conversely, no individual media activity is essential for the platforms. The result is a significant imbalance in bargaining power.
That is why we need a bargaining code for the news media. To survive, local news media companies must be able to negotiate a fair contribution to the cost of creating content that directly contributes to large local profits made by Google and Facebook.
A fair and reasonable news media bargaining code
The final code should include:
• Final offer arbitration – this clear and simple arbitration model limits the incentives of each party to make ambitious claims. This is a much more appropriate model than the more traditional slow and expensive arbitrage approaches.
• Strong protection against discrimination – in other jurisdictions, Google has used its bargaining power to avoid contributing equitably to the costs of content creation. Facebook has threatened to do the same in Australia. The Code must include protections against these unreasonable tactics.
• Cover all services – The Code must apply to the full range of products offered by Google and Facebook, including Google search and its variants, the Facebook news feed and Instagram.
• Exchange of information – Digital platforms should be required to exchange all relevant information with news media companies necessary for fair and balanced business negotiation.
Dispelling myths about the Code
Internationally, digital platforms have been slow to accept the proposition that they should pay fair value for the content of the news media they use.
It is a fact that the Code will not oblige platforms to provide additional user data to news media companies. The Code will not prevent them from making changes to their algorithms or demanding special treatment for news media companies.
We agree that the Code should be fair to all parties and take into account relevant costs and benefits, including any potential “undue burdens” on the platforms’ business interests.
Quickly legislate a code
It’s great news for Australians that the Morrison government has committed to act on this legislation before the end of the year.
Google has publicly stated that it wants to help fund the future of Australian media. It is certainly something that we welcome. Supporting a Fair and Reasonable Code is the first step. The Code is essential in stopping further declines in professional news content in Australia – on which our democracy depends.
This is a critical moment in the development of public policies. It’s too important to miss it.