In the fallout from Facebook blocking Aussies from accessing any and all news last week, one thing became clear. Many Aussies kinda understand what it’s about – proposed laws to make Google and Facebook pay for journalism – but there is still a lot of confusion. So, as the proposed News Media and Digital Platforms Mandatory Bargaining Code is expected to pass through Parliament soon, it’s time to clear up the Government is trying to do with this legislation. These are the pros and cons of the media bargaining code, explained in layman’s terms…
UPDATE: Facebook has agreed to reverse its news ban, in exchange for some amendments to the code. It will now be exempt from the Code if it negotiates ‘enough’ deals with individual publishers, the same way Google is already doing. The amendments do not substantially change the intent or functionality of the Code as outlined below.
What is the Media Bargaining Code, in a nutshell?
A Bill that aims to fix the power imbalance between ‘Big Tech’ (Google and Facebook) and all Australia news media publishers. The problem? Google and Facebook use their dominance to take advertising dollars out of the media industry, while also constantly changing their products and algorithms in ways that make it harder for media businesses to make money.
To solve that problem, the Media Bargaining Code creates a mandatory negotiation process for Big Tech and the media. The result would for all parties to agree on a price for Big Tech to pay to publishers to “use” news content. The Bill lays out what the negotiation process should look like, and what happens if an agreement cannot be reached.
Pros of the Proposed Media Bargaining Code
- The focus of the Bill is negotiation — the Government is essentially trying to push the tech platforms and media to reach their own solution. The core of the Bill actually lays out the parameters for what that negotiation process would be – what type of content is covered, what information needed to be provided by all parties, etc. If they can’t agree with each other, the Bill ends the processes with a ‘final bid’ arbitration method. Final bid means that each party submits the price that they think is fair – you only get one shot – and a panel of independent arbitrators works out what the final price for news content should be. This prevents either side from submitting an unrealistically high or low number.
The fact that Google has entered into negotiations with publishers is a sign that the Bill is doing its job. Facebook was also encouraged to do the same – instead, it blocked all news (Ed note: Facebook has now begun negotiating with individual publishers in good faith). - It would stem the bleeding of ad money from Australian journalism. Journalism and media is traditionally funded by an “advertiser pays” model – in Australia, Google and Facebook take 81c out of every $1 spent in media advertising. This leaves only 19c for all media publishers to fight over. The Bill does provide one solution to this problem by diverting money from the tech platforms back into the media industry (whether or not it is the *best* solution is a different question).
- In late 2020, a significant change was made to the Draft proposal – the price that tech platforms would have to pay for news content must take into account the value provided on both sides. That means the arbitrators would consider how traffic from Google and Facebook helps publishers before deciding on a final price, to prevent the media industry from misrepresenting the reality of the situation for financial gain.
- It does attempt to regulate the monopolistic commercial behaviours of Google & Facebook. Each platform is essentially a monopoly in Australia, and uses that dominant position to make money off users who want to access news content while simultaneously reducing the media outlets ability to make money off that content*. By requiring tech platforms to warn publishers of significant changes to their algorithms and products, the Bill will increase transparency and help publishers adapt to those changes before they lose out on revenue.
*For example: Both Google and Facebook prioritise publishers who use their ‘fast-loading’ formats (Google AMP and Facebook Instant Articles). However, both of these formats significantly reduce the amount and type of ads that the publisher can display on the page, therefore reducing the money that can be made from each reader. So, while the argument that Google and Facebook drive traffic to news sites is true, it does so while simultaneously reducing their ability to pay for the creation of that content.
- Crucially, the Bill stops Google and Facebook from changing their algorithm to penalise the publishers they would have to pay. This is important to maintain an even playing field for all news outlets, big and small.
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Cons of the Proposed Media Bargaining Code
- The biggest criticism of the Bill is that it favours the big players – News Corp and Nine Entertainment Co – who show significant bias towards the Liberal party. This criticism is valid, but let’s be really clear: it’s not just News Corp and Nine. This bill would favour all established media, proven by the fact that other titles (e.g.: The Guardian, Daily Mail Australia, the ABC, SBS, Junkee) also support the principles of the Bill. The truth is the Bill will make it difficult for new, small players to grow.
Media diversity is a related, but also separate, issue. - Google and Facebook have the biggest impact on digital media. However, some publishers also have expensive broadcast and print news operations. The Bill does not do a good job of ensuring that those publishers don’t use the money to “prop up”, for example, newspaper production. Although it’s difficult (and nearly impossible) to do, the Bill should be focused on digital news only.
- The Bill also treats Google and Facebook the same, but they are very different businesses. While both are content discovery/distribution platforms, when Facebook blocked all news for Aussie users, it didn’t change the core product; if Google were to do the same, it would significantly impact what users expect to get out of the platform. By bundling both together, the Bill lacks precision and creates confusion. It would have been better for the Government to deal with each platform separately to create more specific solutions.
- Requests for publishers to have advance notice of algorithm changes is well-intentioned, but impractical. The reality is that tweaks are constantly being made. The Bill did attempt to fix this by saying that ‘significant’ changes must be disclosed to publishers within 48 hours after being made.
So, what am I supposed to think?
Don’t blame yourself for being confused — within the media industry, we can’t even decide what the ‘right’ solution is. As a ‘baby’ independent news publisher, we urge you to keep two things in mind when weighing up toe pros and cons of the media bargaining code:
- Please don’t think of it only as a tool for News Corp and Nine to kill competition. The problem this Bill is attempting to fix is real and affects all publishers, big and small. Media diversity is an incredibly important issue worth considering on it’s own, and by confusing the two topics we risk getting them both very wrong. It’s related, but it’s not the whole issue.
- Support Australian journalism directly wherever you can! Bookmark the news sites you find most useful, subscribe to a variety of email newsletters (please actively read and click through them too!) and pay for journalism if you can – whether through donations, or via paywalls.
