The ACCC is seeking input on the upcoming mandatory code of conduct between US tech giants Google and Facebook and local news media, exploring issues from what constitutes news and “quality journalism” to how a bargaining model, remuneration and enforcement might work.

Stakeholders have until June 5th to make their arguments on how to address “bargaining power imbalances” after the government accelerated its initial timeline last month and scrapped a voluntary approach.

The consumer and competition regulator today released a concepts paper for the mandatory code, informed by its landmark Digital Platforms Inquiry and the previous negotiations between media outlets and the tech giants for a voluntary code, which the government says stalled earlier this year.

The decision to move to a mandatory code was welcomed by large commercial media outlets, which saw it as a sign they will eventually collect some compensation from Google and Facebook for the use of their content. But it disappointed the tech giants which argue they add value to online news publishers and had been progressing on a voluntary code in good faith. 

Google later defended its role by comparing itself to a poster in a newsstand, driving traffic and advertising revenue to publishers. Commercial publishers quickly fired back that the tech giant had “missed the point” in its defence. 

Nine newspapers chairman Peter Costello then demanded Facebook and Google should pay Australian media $600 million each year – around 10 per cent of their local revenue.

“We are keen to tap views on all the issues and ideas involved with this code,” ACCC Chair Rod Sims said in a statement today. “Given the tight timeframe we are seeking precise views on the content of the code and this concepts paper will facilitate this.

“Our digital platforms inquiry highlighted the acute need to address the imbalance in bargaining position between news media and particular digital platforms, and that is what the code will do.”

‘Issues for consideration’

Now it appears the question is how much will Google and Facebook will have to pay and who they will have to pay it to. 

While the ACCC is clear the code will only apply to the digital advertising duopoly for now, it is seeking input on what constitutes “news content” and where the line is for “professional journalists” and “professional news media business”. The regulator is also considering which assets of Google and Facebook should be assessed. For example, would content on Facebook’s Instagram or Google’s voice assistant services be covered?

The ACCC is also considering which bargaining model – collective bargaining versus bilateral negotiation or some sort of licensing arrangement, for example – would best address power imbalances and what would be an appropriate amount of remuneration.

The paper also explores the thorny issues of the platform’s algorithms, “quality” journalism, and control over news and advertisement placements.

The regulator notes in the concepts paper that media companies have struggled to contact the platforms and resolve complaints in the past, and suggests the tech giants implement a dedicated point of contact for media entities.

Dispute resolution

Arguably Australia’s most feared regulator, the ACCC calls for the mandatory code to contain “strong mechanisms to ensure parties comply with all of its requirements” but warns overdoing it could lead to the platforms limiting the distribution of Australian news.

The regulator floats a potential “enforcement body” which could issue financial penalties for failure to comply with the code and be granted investigation powers for compliance audits. But it notes an alternative with non-pecuniary remedies is still on the table too.

The ACCC is also seeking advice on whether the mandatory code should be subject to a review mechanism, for example a review every three years. 

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