Australia’s Media Code Battle and Government Regulation of Tech Giants

Dr. Nguyn Th Trường Giang
12th May 2021

Picture Courtesy: Reuters

Over the last decade, with the growth of Google and Facebook, it is also time for news agencies to face new challenges – as traditional media audiences decreases, and more of ad spent have poured into social media. According to the latest Business Insider’s report, the market share of digital advertising in 2020 by Google and Facebook has sharply increased from 75% in 2019 to 78% from 66% two years ago.

In Australia alone, in 2019, Facebook, Google and Amazon’s total revenue, was many times higher than the Government’s budget revenue; Google and Facebook together earn some 6 billion Australian dollars ($4 billion) a year from advertising in the country.[i] According to a study, about 40% of Google’s search engine clicks are to read news, bringing in tens of billions of dollars in profits, while they pay nothing for the press and publishers. The Australian Competition and Consumption Commission (ACCC)’s report at the 2019 Digital Platform Investigation Conference shows a fundamental bargaining power imbalance between news media businesses and digital platforms that threatens the viability of news businesses.[ii] The report shows that advertising revenue on media has decreased significantly in the past 15 years, from about 2.92 billion USD to 177.75 million USD in 2016.

In order to safeguard the domestic news media sector and impose control over global technology companies, the Australian Government has pioneered the introduction of a bill called the Media Bargaining law, which emphasizes that news media businesses and digital platforms will be incentivised to reach agreements for remuneration for news content on digital platform services for a specified period. In April 2020, the Australian Government asked the Australian Competition & Consumer Commission (ACCC) to develop a mandatory code after the ACCC affirmed that news media businesses are not able to negotiate for a voluntary agreement with major technology companies. In July 2020, the ACCC issued a proposed code, which stipulates that if technology platforms such as Facebook or Google cannot negotiate payment deals with local news media businesses, an independent arbitrator can set the price they pay domestic media, and then they have no choice.[iii] In December 2020, the bill was submitted to the Australian Parliament.

After a period of solid protests that included policy lobbies and threats to stop service in the country, eventually, Google agreed to pay tens of millions of dollars to Australian news corps to acquire the right to use local digital content, which is a significant breakthrough in the battle of news copyright. Specifically, on February 15, Seven West Media, a major media corporation, signed a memorandum of understanding with Google on the use of its news content; accordingly, Google will pay this group about 23 million USD per year.[iv] Followed by Nine on February 17, Australia’s second-largest corporation, which reached an agreement with Google worth more than AU$30 million ($23 million) annually for five years for the use of its news content, part of which is on advertising; the rest is revenue from Youtube content.[v] On February 17, Google also reached a three-year agreement with News Corp, which owns two-thirds of the press agencies in Australia, to feature news outlets in Google’s News Showcase. The deals between Google and Murdoch are worth more than A$60 million.[vi] Besides, Google has also reached commercial agreements with some other Australian news agencies such as Crikey, The Saturday Paper, and Australian Community Media to provide content for News Showcase products. This is Google’s compromise with the Australian news media businesses to maintain long-term interests and create mutually beneficial relationships instead of fighting a lasting battle. There are positive indications that this approach could be extended in many other countries worldwide.

Contrary to Google’s measures, on February 18, Facebook blocked accessing news in Australia.[vii] After one night, Facebook deleted the entire feed of many Australian news sites. Several Australian emergency services were severely affected by the Facebook ban, including sites covering the Covid-19 epidemic, wildfires, or tornadoes. Facebook’s move influenced more than 17 million users of the platform in Australia or two-thirds of the country’s population. This is Facebook’s response to the Australian Parliament’s draft bill and said the proposed Australian law fundamentally misunderstood the relationship between their platform and publishers who use it to share news content. Facebook also reaffirmed that the publishers are in favour, rather than the platform. In 2020, for example, Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million, but the company gained “minimal” from the content and it only made up about 4 percent of users’ news feed. Facebook also affirmed that the deal between news media businesses and digital platforms is an internal affair, and there should be no interference from the state or a third party.

The Australian Prime Minister, Scott Morrison criticized Facebook’s ‘arrogant’ and ‘disappointing’ move and even called on leaders of many countries worldwide to take measures against Facebook’s behaviour.[viii] Governments in many countries such as Canada or in Europe have supported Australia’s approach; UK and German media also immediately called for tighter control of Facebook.

After a week of negotiations, speaking to media persons in Canberra on February 23, Treasurer Minister Frydenberg announced: “Facebook re-friended Australia” and Facebook chief executive Mark Zuckerberg had told him the ban would end “in the coming days”.[ix] On February 26, 2021, news from news outlets showed up again on Facebook, putting an end to a peak week of confronting the Australian Government and users in Australia were able to access news. Facebook are to pay for content from media houses on its platform. In return, the Australian Government agrees to make amendments to its Media Bargaining code, allowing tech companies like Facebook to be more proactive in negotiating with press agencies on copyright issues before bringing the case to arbitration. Both sides declared themselves victorious!

Under the new code, media companies with a minimum of $ 150,000 can enter negotiations with technology companies like Facebook about payment for news content. However, the finalized code gives Facebook the choice of news media businesses to negotiate, which may help Facebook pay less, or even refuse to negotiate with less beneficial partners, such as small media businesses. 161 local newspapers across Australia are concerned that small publications outside major cities may be at a disadvantage.[x]

What is happening in Australia is not just about copyright news, but the growing power of giant technology companies, which is changing the world, declaring war on state power. The blow of the giant Facebook to the Australian legal power has caused shock and discontent not only in the country. A Spanish journalist wrote, “see what just happened in Australia: A technology corporation makes a casual decision, and in seconds has a considerable impact on society. It is a reminder of how much a private company can affect our lives!”

Facebook blocking several websites that alert situations of the pandemic as a threat shows their strength against a big country like Australia. Facebook eventually agreed to step back, but the Australian Government had to modify the bill. According to many analysts, the result of this match was still Facebook winning over Australia. Australia’s concession is another testament to the power of Internet giants and shows that the Internet world has been suffering from a lack of regulations over the past 20 years, international businesses. The corporations have grown and become monsters that can threaten with action, instead of just words of protesting. Before the incident in Australia, Facebook and several other social networks banned Donald Trump even when he was the US president. Or recently, Facebook has banned the account of the Myanmar military government. That shows their power transcends the political power of sovereign states.

The upside of the case is not only that Facebook has agreed to pay, but that it has attracted the attention of  lawmakers in Europe and elsewhere to reflect and develop a  better view of digital platforms’ dominant position. Internet giants are creating huge power imbalances. It is an issue that the modern world must acknowledge, requiring governments to regulate and put this superpower under control. In fact, Facebook and other tech giants face pressure from governments like Australia, the US, or Europe on many issues, but those are still separate stories. It takes cooperation on a global scale between countries, creating strict regulations like global codes of conduct to control these tech firms with great powers.

The drastic involvement of the Australian Government is critical when they are genuinely concerned with the press’s position and acknowledge the need to protect accurate, reliable, and legit sources and news outlets. Indeed, with the introduction of Google News Showcase, Microsoft Bing, and possibly Facebook News in the near future (considering if this technology platform deploys a service similar to Google), the global news media sector will witness many changes shortly. Furthermore, most importantly, the world will continue to maintain reliable journalism, contributing to combating fake and malicious news.

The press agencies have long found themselves obliged to develop a social media strategy and consider it an integral part of journalism. However, from the case in Australia, many press agencies need to review the above strategy – if they are too dependent on social media and considering it as a virtual channel to appeal to the public, it can be a risk. In addition, social networks are heavily regulated by the algorithm, so content visible to the public is unlikely to be high-quality and intended content. In contrast, shocking and sensational news often gets spread. Ms. Isabelle Oderberg, a former editor of News Corp (Australia), spoke to BBC, “The algorithmic changes were made with no pre-warning, no insights and no reasoning … [it] was incredibly frustrating. It affected our traffic, and it was just mostly really upsetting. The social media community would [then have to] wait for Facebook to [explain] the change, though they didn’t always explain it. It’s always been clear what the power balance was.”[xi] That is why press agencies need to develop certain independence from social media.

*The author is Associate Professor & Deputy Director, Academy of Journalism and Communication, Ho Chi Minh National Academy of Politics, Vietnam

 

End Notes

[i] Australian Competition and Consumer Commission (ACCC) (2019a). Digital Platforms Inquiry: Final Report. Canberra, ACT, Australia: ACCC.

[ii] Australian Competition and Consumer Commission (ACCC) (2019a). Digital Platforms Inquiry: Final Report. Canberra, ACT, Australia: ACCC.

[iii] Australian Competition and Consumer Commission (ACCC) (2019), Mandatory News Media Bargaining Code EXPOSURE DRAFT EXPLANATORY MATERIALS, ACT, Australia: ACCC.

[iv] Meade, A., (2021). Seven West Media signs multimillion-dollar deal to join Google’s News Showcase. The Guardian. https://www.theguardian.com/media/2021/feb/15/seven-west-media-signs-multimillion-dollar-deal-with-google

[v] Samios, Z. (2021). Google, Nine agree commercial terms for news content. The Sydney Morning Herald. https://www.smh.com.au/business/companies/google-nine-agree-commercial-terms-for-news-content-20210217-p5736c.html

[vi] Coster, H. (2021). News Corp signs news partnership deal with Google. Reuters. https://www.reuters.com/article/us-news-corp-alphabet-google-idUSKBN2AH1WN

[vii] ABC/Reuters. (2021). Facebook news ban stops Australians from sharing or viewing Australian and international news content. https://www.abc.net.au/news/2021-02-18/facebook-to-restrict-sharing-or-viewing-news-in-australia/13166208

[viii] Scott Morrison (ScoMo). (2021, 18 February). Facebook’s actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing.  I am in regular contact with the leaders of other nations on these issues. [Facebook update]. Retrieved from https://www.facebook.com/scottmorrison4cook/posts/3992877800756593

[ix] The Federal (2021). Facebook ‘re-friends’ Australia, agrees to pay for content from media houses. https://thefederal.com/international/facebook-to-lift-ban-on-australian-news/

[x] McGuirk, R. (2021). Australia passes law to make Google, Facebook pay for news. AP News. https://apnews.com/article/australia-law-google-facebook-pay-news-959ffb44307da22cdeebdd85290c0cde

[xi] Mao, F. et al. (2021). Facebook Australia row: How Facebook became so powerful in news. BBC. https://www.bbc.com/news/world-australia-56109580

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