Thu, 03 Mar 2022 - 14:47

News Media Bargaining Code: One year old and working

Last month, News Corp announced it was joining with Google to establish a Digital News Academy at Melbourne Business School, to provide digital skills training for Australian journalists.


In December last year, the ABC announced it was hiring more than 50 extra journalists in regional and remote Australia.


The Australian Financial Review announced that it would hire an additional 18 journalists; similarly the Sydney Morning Herald and The Age have been hiring trainees.


After a decade or more in which we’ve heard the steady drumbeat of redundancies and closures across the Australian media sector, it has been a refreshing change.


And there is a common factor here. These jobs in the media sector are the result of deals done by Australian news media businesses with the giant global digital platforms Google and Facebook.


These deals have been worth tens of millions of dollars: Seven West Media’s deal for example is reportedly worth around $30 million in additional revenue.


Google has entered into commercial deals with at least 19 news organisations, and Meta with 11. Public reporting suggests that the monetary value of these agreements exceeds $150 million per annum.


A key reason for Google and Facebook to have done these deals is the News Media Bargaining Code developed and legislated by the Morrison Government. Today marks one year of the Code’s being in force.


The aim of the Code is to solve a serious public policy problem: Google and Facebook were using content generated and paid for by Australian news media businesses such as News Corp, Seven West Media and Nine Entertainment Limited, but were not paying for it.


When a video clip from Nine News appears in a Facebook feed, or a Google search leads to an article in the West Australian, that content is helping Facebook and Google to attract people to their platforms.


Facebook and Google have been spectacularly successful at attracting eyeballs and in turn generating stupendous amounts of advertising revenue.  They are two of the world’s largest and most profitable companies.  Google’s parent company Alphabet has a market capitalisation of around USD 1.8 trillion; Facebook’s parent Meta is around USD 600 billion.


But until the Morrison Government took action, they simply refused to offer fair remuneration for use of Australian news media content.


This is not unique to Australia.  It is a global problem.  But attempts by several European countries to resolve it have failed.  The Spanish government, for example, passed a law in 2014 compelling Google to pay local publishers for content. Google responded by shutting down Google News in Spain.


But in Australia the Morrison Government, took a different approach. Advised by our competition regulator, the Australian Competition and Consumer Commission, we came up with a framework that worked, legislating a “negotiate-arbitrate” model, similar to the one used for decades in the regulation of telecommunications.


We started work on this issue in 2017, when then Treasurer Scott Morrison directed the ACCC to conduct an inquiry into the “Digital Platforms,” Google and Facebook.


The ACCC reported in mid-2019, with hundreds of pages of detailed analysis. A key recommendation was the establishment of a code to regulate commercial relationships between Google and Facebook on the one hand, and Australian news media businesses on the other.


Through a methodical process, involving extensive consultation with all stakeholders, including Google and Facebook themselves, we developed successive drafts of the Code.  We introduced it into Parliament in late 2020 and it came into effect on 3 March last year.


When Google, famously, threatened to withdraw from the Australian market, the Prime Minister held a well-publicised meeting to allow Microsoft’s Global CEO to brief him on Microsoft’s willingness to sharply expand the services of its search engine Bing in the Australian market. Google got the message.


Our aim was to regulate just enough to get the parties to the table to conduct the commercial negotiations that would have happened naturally were it not for the extraordinary market power of Google and Facebook.


The Morrison Government came under considerable pressure from both companies. But the Prime Minister and Treasurer were stalwart and we did not back down.


I’m not surprised that other nations, including Canada, are now looking at introducing their own versions of the News Media Bargaining Code. With the Code, as with our tough online safety laws, Australia has a world-leading position in making sure big tech operates in a lawful and responsible way inside our national borders.