All Australian news media entities, with the exception of the ABC and SBS, are to be given the power to force global tech giants Google and Facebook to pay for their use of local news content.
A draft Bill to amend the Competition and Consumer Act released on Friday by Treasurer Josh Frydenberg and Communications Minister Paul Fletcher will be introduced to federal parliament after final stakeholder and public consultation at the end of August.
Under heavy legislated penalties of up to 10 percent of their Australian turnover, Google and Facebook will be required to negotiate commercial revenue-sharing arrangements with any or all media entities the Australian Communications and Media Authority (ACMA) declares to be eligible.
News media companies providing free online content such as Guardian Australia, The Conversation and The New Daily, or those with subscriber-only paywalls, such as News Corp or the Nine Entertainment mastheads, are empowered to bargain individually or collectively.
If commercial agreement cannot be reached after ‘good faith’ negotiations within three months, the draft bill provides for compulsory ‘arbitration’ by a mutually agreed arbitrator or ACMA-appointed panel. With costs to be shared by the parties, the arbitrator will have the power to accept the remuneration proposal of the tech platform or the news media entity or collective of entities.
In determining which offer to accept the arbitrator will be required to take account of the “direct and indirect benefits of Australian news to digital platforms”, the costs incurred by local news media entities, “and whether an undue burden” would be imposed on the digital platform.
In justifying his coercive regulation of the tech giants, Treasurer Frydenberg said that in every $100 of advertising spend each year Google took $47, Facebook took $24, with only $29 to the other local media.
The arbitration on remuneration will be binding on the tech platforms. It remains to be seen if Australia’s big news media companies, News Corp, Nine Entertainment and Seven West take advantage of the legislation giving them collective bargaining power.
There is also the real prospect that Google and Facebook will challenge any legislation to test Australia’s competition and copyright laws, up to the High Court.
While Spain, France and other European countries have tried a so-called ‘Google tax’ to try to counter the tech giants’ disruption and dominance of their local advertising and media markets, Australia’s mandatory revenue sharing laws will be a world first.
Rupert Murdoch’s News Corp has been hypocritically advocating regulation for the tech giants for many years, despite of Mr Murdoch’s early failure with US tech platform MySpace, which was competitive and level-pegging with Facebook in user uptake at the time of its acquisition by News.
Facebook and Google now enjoy user ubiquity in Australia.
While the public broadcasters will benefit from non-discrimination and notice of algorithm changes which could affect their online rankings, the government’s draft bill specifically excludes the ABC and SBS from the code’s remuneration provisions.
Minister Fletcher said: “The reason for that is that they are funded principally by government and the policy emphasis of the work that’s being done here is in relation to the advertising-funded part of the media sector.
“The public policy interest is in having a vigorous commercial or advertising-funded media sector which, in turn, can fund and carry out important public interest journalism…
“[That’s the] important role that the government broadcasters carry out but, of course, with government funding.”
SBS takes advertising. The ABC Act prohibits the ABC from running ads.
So much for a level playing field.
While the draft bill excludes the ABC and SBS from any mandatory revenue-sharing it remains unclear if this exclusion was the considered view of Mr Rod Sims, chairman of the Australian Competition and Consumer Commission, who had been directed by the government to draw up the code.
The ACCC’s explanatory Q-and-A and other material posted with the draft bill and draft code is silent on the ACCC’s position in regard to including the public broadcasters.
The ABC had submitted that it was entitled to a share of the revenues, along with other free and subscriber content providers on the level-playing field and value-adding principles. This is contentious because, since the 2019 bushfires, the ABC is now an industry leader in online news with market share greater that News or Nine Entertainment news sites.
The New Daily understands that the ABC, already suffering from government defunding, will continue to press its case in the final consultation phase and may seek Senate crossbench support for an amendment to the government’s bill to guarantee its inclusion, along with SBS.
Any crossbench vote could be decisive if Centre Alliance and Senator Jacqui Lambie’s support is counted in favour of the public broadcasters.
Opposition communications spokesperson Michelle Rowland told The New Daily that Minister Fletcher and the government were ignoring the ABC’s submission that any revenue it could derive by being included in the mandatory code would be directed to enhancing the ABC’s regional and rural coverage and services.
Google and Facebook have rejected claims by the big media companies that up to one billion dollars a year in revenues could be up for grabs through the code. They argue that news content of itself is not the driving force in the user experience and that ‘snippets’, short descriptions of paywalled news content posted on Google and Facebook, help drive users to take up paid subscriptions with news media companies.
True or false, Google and Facebook now face their first legislated revenue-sharing regulations.
While they have been negotiating privately with some media companies, they now confront punitive sanctions if they do not pay up – one way or the other.