The News Media Bargaining Code explained

 What is the Code?

The News Media and Digital Platforms Mandatory Bargaining Code is a mandatory code to help support the sustainability of public interest journalism in Australia. It states that it will do this by addressing bargaining power imbalances between digital platforms and Australian news businesses.

The Bill Digest for the code states that the code’s purpose is to address a clear and significant bargaining imbalance that exists between Google and Facebook on the one hand and the news media businesses. This is the essence of the code. It evens out the bargaining positions so that fair commercial deals can be made. Without the code as a backup, that power imbalance will remain. There will be not be commercial deals; instead the platforms will be free to continue to offer terms on a take-it-or-leave-it basis.

The Code was introduced as a Bill to Parliament in December 2020, as Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020. We started collating information on its status in mid-January, keeping a keen eye on the next milestone, which was 12 February 2021, when it returned to the Senate.

After Facebook’s blackout on 17 February and the subsequent negotiations, some amendments were made, which can be read in full here.

The Australian Communications and Media Industry has been placed in charge of the implementation of the code. Their website says that they have three main roles under the code:

  • assess the eligibility of news businesses who want to participate in the code
  • appoint mediators to assist bargaining parties
  • register and appoint arbitrators if bargaining parties cannot agree on the make-up of an arbitration panel.

If you’re keen on a summary of all the hearings and parliamentary comments and submissions from committee – the Bills Digest from the Parliamentary Library is a good read.

 

WHAT DO GOOGLE AND FACEBOOK SAY ABOUT IT?

Google has published strong responses to the creation of the code over the last 18 months, but their most recent response can be found in an open letter here and a clear FAQ page here. They have discussed the submissions and highlighted other business that have concerns, which you can read here.

They have also been utilising space within Google search to direct consumers to read more about their response.

Here’s a short video from Mel Silva at Google stating their views (also shared in the open letter):

 

 

When we break it down, Google is saying:

  • They are willing to pay for journalism but think several aspects of the version are unworkable
  • They feel this will break the way search will work and is against the fundamental principle of a free and open web
  • Google has some proposals to amend the current code into something that they feel will be more workable.
  • Google suggests that their newly launched Google News Showcase could be a compromise for all.

Read more about the launch of Google News Showcase in Australia.

You can also read this blog from Google: What people are saying about the code

 

Facebook suggested that the Bill was in fact not a bargaining code, writing in its submission to the committee that,

It removes the potential for genuine bargaining by forcing Facebook to make payments that are detached from true calculations of commercial value and by incentivising news publishers to make unreasonable ambit claims and bargain in non-commercial ways. It removes any meaningful influence over our own commercial dealings with publishers.

Source: Media Watch, Google news war

This was their view prior to their Facebook News Ban, which we have summarised in a separate post here. It’s fair to say that they took fast action prior to the code being passed, with a detrimental impact to their brand.

 

Other voices against the implementation of the code have raised the following questions:

  • If Google leaves, the company that fills the search void would still have the same issue … facing payment for links
  • The code could harm small and emerging players
  • Does targeting two US companies break Australia’s free trade agreements?

 

Ben Shepherd, Managing Director at Thinkerbell, has been quoted often in the past week on this topic and one of his many relevant quotes is,

Google has built a successful business and I believe it’s being punished for that, many years after their acquisitions and movements had been green-lit by government authorities.

 

You can read additional articles from commentators regarding their responses in the below links:

ZDNet: Facebook and Google are still fighting Australia’s media bargaining code

The Guardian: Media Code could break www

NetChoice: Shake Down of American Tech

AdNews: Google threatens to turn off search in Australia if media code passed

The New Daily: Media giants cash grab 

Mumbrella: The old news business model is broken

BBC: Could Google really leave Australia?

Crikey: Media abandons balance in pursuit of Google’s billions

The Guardian: Inevitable Google and Facebook will pay, says Treasurer

Which50: Zuckerberg lobbies Australian Treasurer on media code

Mumbrella: Google Media Buyers and Publishers react 

AdNews: Will Google Really Pull Search from Australia

AdNews: Small Digital Publishers at Risk if Google Pulls Search

Economics Explained (video): The End of YouTube

The Conversation: The Government could subsidise journalism

AdNews: The argument against the news bargaining media code

MediaWatch (video): Google News Wars

 

Source: Media Watch, Google News war

WHAT DO THE GOVERNMENT & SUPPORTERS OF THE CODE SAY?

The Treasurer, Josh Frydenberg, has been interviewed about his views on the code. It is clear that he believes that news is critical to democracy and that he is looking to support an eroding media industry.

It’s not protecting traditional media companies but creating a level playing field with compensation for production of original news content.

 

The Prime Minister of Australia, Scott Morrison, said when addressing the National Press Club on Monday 1 February that,

Having a news environment in this country that is one that is sustainable and is supported commercially, then this is vital to how democracies function.

 

Source: Media Watch, Google News war

 

The Guardian: Inevitable Google and Facebook will pay for Australian News, says Treasurer

AFR: Digital Giants Should Focus on paying for content

ABC: Frydenberg tells Zuckerberg the government won’t back down

SMH: Frydenberg hits out at tech giants for shifting goalposts

Innovation Australia- government won’t budge

B&T: Microsoft Interested in Growing Presence

HOW DOES THIS IMPACT ME?

We will know more once the Bill returns to the Senate on 12 February 2021. In the meantime, we watch the media and see if negotiations between government, media publishers, Google and Facebook can garnish any results before then.

 

Tell me more…

We reckon you’re probably being asked a bunch of questions regarding these two topics and many may come from colleagues who aren’t close to your digital strategy or are not across the particulars of how digital advertising works.

 

Be the subject expert

It’s important to be across these two topics in particular as they play in the current news cycle and be the subject matter expert (SME) in your business for it. Gather information, review news alerts daily to see what is happening but it’s also important to…

 

Remain objective

While you’re becoming the SME within the business, it will be easy to form your own opinion on the pros and cons of such legislation and report findings but it is also important to remain objective.  If you are seen as the expert, it could be that stakeholders take your opinion as the organisation’s opinion and may not appreciate that this could change over time, with additional information and insight.

 

Check your audiences

Both the NMBC and the ACCC investigation reference third-party cookies and Chrome. This change has been reported on a lot over the past 12 months and Google isn’t the first platform to instigate this change. However, with this additional focus on data, it is a good time to ensure you have ownership of your audiences and that you are clear about what first party data your business holds.

 

Limit strategy reactions

Now is not the time for knee-jerk reactions or to up-end your digital advertising strategy and media channels. It is critical to remain ready to speak to your customers wherever they are online. 

 

The next key date for the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) is 12 February 2021, when the Economics Legislation Committee will provide their report back to Senate. So there will be more information coming shortly on what this will look like moving forward.

 

At the moment, we’re watching and waiting as well.  Get in touch with the team at Datisan if you want to talk through any of this in more detail – we’re here for you.

 

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