Australian news media trading code snatches $140m from Google and Facebook

More than a year after Australian political parties from all walks of life united around a law that caused Google and Facebook to pay for the news they distribute, 24 other smaller outlets will now get the money from Google. This means that Google has agreements with virtually every eligible media company.

These deals, and those with Facebook, have pumped more than A$200 million into Australian journalism each year, according to Rod Sims, the former chairman of the Australian Competition and Consumer Commission who launched the Code.

In 2021, Australia innovated by using competition law to make Google and Facebook pay for the information they disseminate. Despite the differences between the Liberal Party then in power and the opposition Labor Party, political parties, many media and some NGOs, United around a common objective: to make Google and Facebook pay the media. Concerned about the power imbalance between the media and the tech giants, Sims proposed the code in order to push “digital platform companies” to negotiate with the media.

As the law currently stands, if an agreement is not reached, the government can step in and require both parties to submit to binding arbitration in which each party submits its final offer. This use of “baseball arbitrage” is key because it means that well-funded tech companies cannot drag out negotiations, impoverishing smaller outlets that don’t have the resources to withstand a long period of negotiation.

The codedstraight from the 2019 ACCC report survey of digital platforms, was controversial. Critics argued it would be a big giveaway for Murdoch-owned outlets while excluding smaller, independent ones. This did not turn out to be the case as hundreds of publications large and small have benefited.

Google and Facebook lobbied against the code, with Facebook block australian news for several days in 2021. However, Australians took a practical view and united across the political spectrum to push the bill through.

On a recent trip to Australia, meetings and interviews with journalists, journalism professors and government officials showed widespread enthusiasm for the financial increase of Australian journalism. Outlets across Australia are hiring new journalists. The Guardian added 50 journalists, bringing their newsroom total to 150. Journalism professors say their students are hired and there are too many vacancies to fill.

“The Code has brought much more money to new outlets than expected,” said Harry Dugmore, senior lecturer in the department of communications at Australia’s University of the Sunshine Coast. “The question is what will happen when the contracts expire?” Each outlet has its own agreement, so expiration will occur at different times, but early contracts may expire in two or three years. Observers note that staggered expiration dates give platforms an advantage in trading and that sector contracts would give the media an advantage.

Facebook, however, refused to negotiate with many smaller outlets as well as two large, quality organizations: The Conversation and the hybrid-funded utility Special Broadcasting Service. This prompted calls for the government to step in and force them into binding arbitration.

“It’s a shame that SBS and The Conversation have been kicked out. It’s time to designate Facebook,” Green MP Sarah Hanson-Young said, referring to the process by which the government would require a particular company to negotiate with outlets. So far, no outlets have been named, suggesting the code has encouraged Google and Facebook to join the table.

YouTube and Instagram were excluded from the Code in part because YouTube was already sharing revenue and Instagram was not showing much information at the time. Now that they are, some observers say it’s time for them to start paying the media.

Under Australian law, a exam code is in progress. A report should be submitted to the Head of the Treasury and the Minister of Communication, urban infrastructure, cities and the arts at the end of September and probably released in October. The Treasury will make recommendations to modify the code, but it is not clear whether the recently elected The Labor government will make revising the code a priority. Facebook has would have refused to attend scheduled review meetings with government officials last month.

During the adoption of the code, the support of the Green Party was essential. “If we couldn’t achieve this when we had the majority of the mainstream media on board and the political parties in agreement, what hope would we have had in terms of doing anything to regulate the online space? “said Green MP Sarah Hanson. -Young.

She noted that widespread support for the Code stemmed in part from public sentiment that it was time to regulate big tech and in part because polarization in the United States showed what could happen if quality journalism was not supported. The need for reliable information during the Covid pandemic has further underscored the importance of strong news media.

The Media Entertainment and Arts Alliance, a union that represents 5,000 journalists working in Australia, provides qualified support for the code. Yes, he pumped money into the system, said director Adam Portelli. “(But) what the current negotiation process lacks is transparency. While there is no doubt that significant new funding has been provided to Australian news media companies since the code came into effect, the amount and purposes for which these funds have been deployed by media organizations are not not known to the public. This clearly precludes any evaluation of the effectiveness of the code.

“One of our main concerns with the code is that it does not specify that the funds generated by the negotiation agreements must be allocated to the production of journalistic content. Without it, the public cannot trust that the code actually works. »

Misha Ketchell, editor of The conversation, said Google was quick enough to offer a deal but Facebook simply refused to come to the table. “The other problem we faced early on in closing deals was just the information asymmetry in the market. There was no market. We didn’t know anything. We went to Facebook and Google and we asked, “What’s right?” And no one really knew.

And in Australia, Google and Facebook made point-of-sale agreements sign nondisclosure agreements.. My colleague from Columbia University, Bill Grueskin, visited Australia earlier this year and called the code “a murky deal, with critical details guarded as if they were nuclear launch codes “.

A sin many countriesAustralian small outlets concerned that they would be excluded from a bill that would primarily benefit mainstream media, especially Murdoch-owned media. However, in Australia, the bill was designed so that most small outlets could strike deals if they band together to negotiate. This was made possible because the Australian Competition and Consumer Commission granted an exemption allowing collective bargaining to any outlet with annual revenues of less than $10 million per year.

Some 84 small outlets that make up Country Press Australia have bargained collectively with Google and Facebook.

Emma McDonald of Minderoo FoundationFrontier Technology’s initiative spent six months helping another group of 24 outlets – including multicultural, LGBTQI+, outlying urban, regional and arts organizations – negotiate a deal with Google.

Australia started the discussion by putting in place its code. And it seems to work better than its skeptics expected.

The Journalism Preservation and Competition Bill sponsored by U.S. Senator Amy Klobuchar, D-Minn, follows the spirit of the Australian code by requiring Google and Facebook to pay for the content they use. The JCPA takes up the idea of ​​a form of binding arbitration as leverage to bring both parties to the table and make reasonable offers. However, the JCPA differs in that it does not allow contracts that keep the terms secret from the government. Republicans objected, saying the money could flow to the Washington Post, New York Times and Wall Street Journal from the bill, which they consider biased reporting. These points of sale already receive Tens of millions dollars from the deals they have with Google and Meta and should be excluded, along with the larger broadcast networks, from a final release.

Canada is likely to pass a law similar to Australia’s, slated for a vote in October. The Canadian version corrects deficiencies in the code, in particular the lack of transparency terms of the agreement. Under the Canadian project Online News Actthe terms of the contract must be disclosed to the governmentbut not the public.

Indian and South African officials have said they would consider similar legislation, but nothing has been proposed. SSwedish media are also discussing the possibility of pushing for a version of the code. Brazil’s proposal to force Google and Facebook to pay for information was torpedo by Google, Facebook and President Jair Bolsonaro in May, as journalist Patricia Campos Mello explained in a previous article by Poynter. EU countries use copyright law to force Google and Meta to pay for information. Meta a said recently that news distribution is no longer a priority for the company, although this does not necessarily translate to the complete elimination of news feeds.