On the 31st of July, the Australian Competition and Consumer Commission (ACCC) released a piece of draft legislation that would govern the actions of tech giants such as Google and Facebook in a way no country has done before. And Facebook and Google are fighting back.

The draft legislation, titled “Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020,” and dubbed the ‘News and Media Bargaining Code,’ attempts to moderate the relationships between companies like Google and Facebook and the Australian news media.

The age of the internet has created a relationship of mutual reliance between news organisations and tech and social media companies. These companies use news content to keep viewers on their site, and news organisations rely on search engines and social media to get their content shared as widely as possible.

This bill could have major national, and international, effects on the way we consume news. And, according to Facebook’s Managing Director & Vice President in AU and NZ, Will Easton, may lead to news content being pulled from sites entirely.

What will the News and Media Bargaining Code do?

The bill attempts to moderate the relationship between tech giants and news organisations by outlining four main requirements that would govern how the news media and the digital platforms that host their content can negotiate.

The major players affected will be Google and Facebook, however revisions to the bill have made both Instagram and Youtube exempt with the possibility of inclusion at a later date.

The first of the requirements only allow news media corporations that have registered with the Australian Communications and Media Authority (ACMA) to gain the benefits of this legislation if they intend to negotiate with a digital platform. Meaning media organisations that are happy with the deals they have with Google, Facebook or any other digital platform can go about business as normal.

The second requirement revolves around arbitration and remuneration. If the parties cannot agree about remuneration, the financial compensation for use of media organisations content, an arbitral panel will select between the two offers made by the parties. If a news corporation and digital platform can’t decide how much money they should be getting paid, the ACMA will decide for them.

The legislation will require digital platform holders to tell the news business: if their content algorithm changes, what data they collect, how that data can be made available to them, and how their content is displayed. The bill refers to this as minimum standards.

The final portion of the legislation is a set of non-discriminate requirements. Meaning digital platform holders can’t disadvantage the content of a media company. As long as it’s an Australian corporation that has news as a core part of its content, and is held to some journalist standard, they should qualify. There are some interesting considerations given to the ABC and SBS; while both can take full advantage of the minimum standards mentioned earlier, they can’t bargain for remuneration as they are government-funded corporations and don’t rely on ad revenue. 

Since the announcement of the draft legislation both Google and Facebook have come out hard against the code with Google claiming that it will reduce the quality of services it can provide.

Why is this bill so important?

In the legislation’s own words, this bill aims “to address bargaining power imbalances between digital platforms and Australian news businesses.”

The 2019 Digital Platforms Report by the ACCC outlined this bargaining power and found that while digital platforms get to contributed to news-making there is nearly no legislation that governs them, unlike other media businesses.

The report states that digital platforms contribute to news making through algorithms designed to generate traffic. These algorithms limit production of what the report calls “public interest” which includes things like Government policy and reports on corruption. Public interest stories don’t tend to traffic very well on digital platforms, which, in turn, means less time is spent producing them. This has a direct result on the news that is being both produced and actively distributed to readers, leaving the population less informed about issues of policy and other political matters. This, naturally, has a negative effect on the functioning of democracy. 

The ACCC gave a long list of recommendations for changes to current laws and new laws. In these recommendations, they suggest that digital platforms should create a code of conduct to govern their relationship with media businesses. The report suggested that the designated digital platforms, Google and Facebook, be given nine months to come up with said code of conduct. In the event they are not capable of this the AMCA should do it for them. 

What does this bill mean for the future of Australian news consumption?

News results on Google
Image: Obi Onyeador

Well, it’s hard to say. As mentioned at the top of this piece this is first legislation of its kind anywhere in the world, so there aren’t really any case studies to look at. Outside of that it really depends who you ask.  

Google would have you believe this legislation would be the end of smaller news establishments. Google ANZ chief Mel Silva said in a blog post “If you ran an independent travel website that provides advice to people on how to plan local holidays, you might lose out to a newspaper travel section because they’ve had a sneak peek at changes to how Search works”. While this might be theoretically true but without any real evidence it is hard to prove.  

While Good is fighting this, Facebook has decided that should the bill be passed it will pull all news from Australian users. Will Easton, the Managing Director & Vice President of Facebook Au and NZ, said in a blog post ‘Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram.’ Assuming Facebook makes good on this threat, it may well have the opposite effect intended by the bill.

Even the academic world doesn’t really seem to know how this bill will impact the consumer. A multi-institutional team of scholars from the University of Sydney and QUT penned a letter to the ACCC, their conclusion was “the effects will no doubt have a complex and unforeseeable impact.” 

Facebook and Google have a lot of power. In the next year we will see how well the Australia Government can regulate these international internet giants.

One thought on “What is the News and media bargaining code and how will it affect you?”

  1. This will cover advance notice of algorithmic changes and the requirement to engage in good faith bargaining for up to three months, before participating in the mandatory arbitration process. The code has reasonably strong enforcement provisions in cases where there is a failure to negotiate in good faith, comply with an arbitration decision, avoid participation or engage in “retaliatory action against news media companies”.

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