Australia’s “world first” attempt to reign in tech tycoons has reached pantomime levels. The watered-down version likely to become law this week will do little beyond helping to line the pockets of large commercial publishers who give no guarantees the proceeds will go directly to funding journalism.

It is now entirely possible no company will ever be subject to the News Media Bargaining Code let alone the two – Google and Facebook – it was specifically designed for, making the last year of promises, debate and threats even more farcical. 

The latest concessions to Google and Facebook in the code make it a far cry from what was recommended by the ACCC following a landmark examination of the platforms which uncovered the obscene market dominance and bargaining power of two companies.

The regulator had called for a code of conduct that platform companies would develop themselves but must include commitments to:

  • share data with news media businesses;
  • not stop news media companies from monetising their content;
  • provide early notification of changes to ranking algorithms;
  • to fairly negotiate with news media businesses as to how they would be compensated for any news content that provides direct or indirect value to the platforms.  

Precious little is left from that proposal after an attempt by the government to strong-arm the platform companies with a mandatory code and a subsequent game of brinksmanship.

When Facebook did what it said it would do and clumsily turned off news content in Australia last week, capturing health, weather and emergency services in its “news” ban, and Google maintained its threat to leave the market altogether, the Australian government blinked first.

Even before Facebook’s news ban, the government had quietly made changes that would require any arbitration between publishers and platform companies to consider the “two way” value exchange occurring.

And in 11th-hour amendments as parliament debates the legislation this week, the government has given itself a new way of not applying the code to the tech giants altogether.

Platform companies can now avoid designation if they can satisfy the Treasurer their deals with publishers constitute “a significant contribution to the sustainability of the Australian news industry”.

While it has always been up to the Treasurer to decide which platform companies to designate under the code, Facebook and Google have always been the explicit targets. The change now gives the Australian government an easy way to not apply the code to them, and follows intense lobbying from the platform giants.

We are left with a bizarre scenario where a code specifically designed for Facebook and Google may never be applied to them. While publishers are left more dependent than ever on the tech giants and unable to bargain any more collectively than before – a consequence that will hit smaller and regional publishers hardest.

Even if platform companies are designated they will now receive at least 30 days notice – more time in which to strike deals and stave off the regulation once more. And if they think they can’t avoid it Facebook has already said it is willing to pull the plug on news again to make sure. The government is now on board with that too, according to the social media company.

So expect this debate to flare up again in three to five years time when many of the new deals expire. It will then be up to the Treasurer of the day to decide if leaning on “big tech” is a vote winner and dust off the code.

Communications minister and treasurer Josh Frydenberg. Image: Twitter.

Another subtle but vital change is the removal of several of the requirements for platforms to give advanced notice of changes to practices or algorithms that affect referral traffic and advertising.

Facebook and Google have successfully lobbied to have notice of changes to “internal practices” removed altogether as well as notice of algorithm changes to advertising to be cut. 

The change helps the companies, which make hundreds of billions of dollars each year selling online ads, to keep a lid on their advertising algorithms, perhaps their biggest concern all along.

While the threat of the code has spurred a flurry of deals between Google and publishers (expect more to come from Facebook now it has its preferred changes), there is little detail of the terms or commitments on how the revenue will be spent.

Asked last month, before any deals were signed, if the new revenue would go towards hiring more journalists, executives from Australia’s biggest media companies said that would be their “hope” but there was no way of knowing how big an impact it would have.

Nine even left open the door that the money could be used to “plug” earnings gaps if its overall business doesn’t improve. The publisher has since reached a 5 year $150 million agreement with Google, leaking the terms to its own newspapers but saying nothing about how the money will be spent.

The ABC has committed to using any revenue from its deals to support regional journalism, but even that comes with unintended consequences.

Australia’s News Media Bargaining Code began as a well-intended and innovative approach to addressing the market imbalance created by two effective monopolies. Along the way it was co-opted by a government keen to appease friendly media and be seen as standing up to big tech.

Stripped of the few provisions that went to the core of a market failure, we are left with an uninspired solution that gives a sugar hit to rent seekers but provides no guarantees for sustainably funding journalism.

It’s worth remembering the regulator has also recommended grants for local journalism and tax settings to encourage philanthropic support for journalism as ways of addressing the dominance of digital giants and the dwindling resources for journalism. A more vigorous pursuit of the tech giants tax responsibilities would also be helpful. 

There are better and more creative ways to address public interest journalism’s problems and hold platform giants to account. The News Media Bargaining Code looks set to achieve neither.

Feature image: Julian Meehan

LinkedIn
Previous post

Adobe and Shutterstock back VidMob as it Raises $50 Million

Next post

Stripe partners with Afterpay to bring BNPL to online merchants