Over the past few weeks, the media showdown of Google & Facebook vs the Australian Government has become the talk of the town and come under intense media scrutiny. This complicated situation has not just sprung out of nowhere; tensions have been growing since July 2019. Here’s what you need to know:
So what’s going on?
In July 2019, the ACCC published the Digital Platforms Inquiry, which found a significant bargaining power imbalance between digital platforms and Australian news media businesses. The report identified Facebook and Google as the main platforms that exacerbate the bargaining power imbalance, inhibiting news media businesses from negotiating a share of revenue that digital platforms produce from the news content they create.
The Inquiry deemed that Government intervention was necessary to protect Australian news organisations as they provide such an important public service by producing and circulating news.
Based on the Inquiry findings, in April 2020, the Australian Government asked the ACCC to form a mandatory code of conduct to address the bargaining power imbalances, specifically in regards to Google and Facebook. This was then developed into the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill, which was introduced to Parliament in December 2020.
Essentially, the Australian Government wants Facebook and Google to pay a fair price for Australian news content which can be achieved if Parliament passes this Bill. Given the pandemic caused numerous news businesses to close down and stop printing, the Australian Government has strong motivation to pass this Bill and ensure the longevity of Australian news.
What does the Bill say?
The Bill sets up a mandatory code of conduct to bolster the Australian news sector’s sustainability by addressing the bargaining power imbalance made evident by the 2019 Digital Platforms Inquiry.
The Bill does this through six key areas:
Requires digital platform corporations and news business corporations to bargain in good faith.
When a digital platform and news corporation can’t come to an agreement regarding remuneration for the availability of news content, an arbitrator will be appointed to select between the two final offers made by both parties.
Requires digital platforms to notify news corporations of changes in the algorithm or internal practice that will affect news content in advance.
Requires digital platforms to not differentiate between news businesses that participate and do not participate in the Code.
In the event of a digital platform reaching a commercial remuneration agreement with a news business outside of the Code is valid, and those who notify the ACCC of such an agreement don’t need to comply with the bargaining, compulsory Arbitration, and general requirements.
To save time and money, digital platforms can make bulk standard offers to news businesses. If the ACCC is notified of the standard offer agreement, the parties won’t need to comply with the bargaining, compulsory Arbitration, and general requirements.
The parliamentary Minister in charge of the Code gets to decide which digital platforms the Code involves, so long as there is a significant power imbalance present. Once nominated by the Minister, the platform is required to comply with all aspects of the Code.
Breaches of the Code result in civil penalties that is the greatest of:
- $10 million;
- Three times the value of the benefit of ‘the breach’; or
- 10% of annual turnover.
Google’s response to the Code is a mix of user-focused advertising, political lobbying, and threats.
In August 2020, Google posted a call to action on Twitter using its Youtube accounts. These posts aimed to get creators to swamp the ACCC with complaints regarding the Code. Google ignited Youtube creators’ fears by stating that the Code would give Australian news corporations an advantage in the Youtube Algorithm, making other creators receive fewer views and earn less as a result. They also stated that the Code would put the free services that the Australian public use at risk. The ACCC hit back at this, saying that “Google will not be required to charge Australians for the use of its free services such as Google Search and YouTube, unless it chooses to do so.”
In addition, Google has appealed to the Australian general public by publication of an ‘open letter’ through the Google homepage in the form of an alert. The main argument within the open letter is that “the Code’s rules would dismantle a free and open service that’s been built to serve everyone, and replace it with one where links come at a price, and where the Government would give a handful of news businesses an advantage over everybody else. That puts Google’s business in Australia—and the services we provide more than 19 million Australians—at enormous risk.”
In 2021, Google is threatening to pull the popular search engine from Australia if the Bill is passed.
Google is also drawing fire for running a controversial experiment on 1% of Australian users – hiding Australian news businesses, like the ABC from search results. Peter Lewis, the head of the Australian Institute’s Centre for Responsible Technology, told the ABC that if it’s true that Google used the ABC in the experiment, it would “taint” the global digital platforms argument that news “is not of greater value than, say, a cat video… It’s really concerning for all Australians that care about access to the news, particularly during a pandemic when important public health information is vital.”
However, Google is not merely in opposition of the Code. They have brought an alternative solution to the table that aims to achieve the same goals as the Code but through a different methodology. In their open letter, Google proposed their solution:
“We’re proposing to reach deals to pay publishers through Google News Showcase, a program we’ll invest AU$1.3 billion in globally over the next three years to help news businesses publish and promote their stories online—paying for their editorial expertise and beyond-the-paywall access to their journalism, rather than for links. Since News Showcase launched last year, we’ve doubled the number of publications that are part of the program globally to nearly 450—and we know Australian publishers want to be involved. We think News Showcase is the right solution for negotiating payments to publishers under the Code. It offers a fair, practical way forward, meets the original goals of the law, and helps secure a strong future for Australian news.”
In terms of outward backlash and campaigning against the Code, Facebook has been less vocal than Google about their disapproval. However, they have now undertaken some serious lobbying efforts by hiring accomplished lobbyists who personally know the Prime Minister, Scott Morrison.
In addition, Facebook has publicly considered withholding the launch of Facebook News in Australia and has also threatened to remove the ability to post news content on Facebook in Australia if the Code becomes law.
Recently, Microsoft has publicly backed the News Media Bargaining Code. Microsoft has even gone so far as to suggest that Bing could fill Google’s place if it follows through on its threat to pull the search engine in Australia.
Why is this Important?
The world is watching as the News Media Bargaining Code progresses through Parliament. If passed, it would set a global precedent when it comes to paying news companies for content. After all, a strong and independent News sector is vital for accountability within a well-functioning democracy. This cannot occur if news corporations continue to be put out of business by digital platforms like Google and Facebook who exacerbate the bargaining power imbalance for revenue.
But then again, where does the line get drawn? If the law requires one business type to be paid for a website link in search engines, why shouldn’t others?
It will be interesting to see how the Code proceeds through Parliament. No matter the outcome, it will be a defining moment between big digital business and Government.