August 16, 2022

More than a year after Australian political parties across the spectrum united around a law that pushed Google and Facebook to pay for the news they distribute, a further 24 smaller media outlets will now receive money from Google. This means that Google has made deals with essentially all qualifying media companies.

These deals, and those struck with Facebook, have injected well over $140 million ($200 million AUD) into Australian journalism each year according to Rod Sims, the former chair of the Australian Competition and Consumer Commission who initiated the Code.

In 2021, Australia broke new ground by using competition law to get Google and Facebook to pay for news they disseminate. Despite the differences between the then-ruling Liberal Party and the opposition Labor Party, political parties, many news outlets and some NGOs, united around a common goal: making Google and Facebook pay media outlets. Worried about the power imbalance between media outlets and the tech giants,  Sims proposed the code in order to push “digital platform companies” to negotiate with media outlets. 

As the law stands, if an agreement is not reached, the government can step in and require the two sides to go into binding arbitration in which each side submits its final offer. This use of “baseball arbitration” is key as it means that well-funded tech companies can not drag out negotiations, impoverishing smaller outlets that don’t have the resources to withstand a long bargaining period.

The code, which came directly from the ACCC’s 2019 digital platforms inquiry, was controversial. Critics argued that it would be a big gift to Murdoch-owned outlets while excluding the smaller, independent ones. This has not turned out to be the case as hundreds of publications, large and small, have benefitted. 

Google and Facebook lobbied hard against the code, with Facebook blocking Australian news for several days in 2021. However, Australians took a practical view and united across the political spectrum to get the bill passed. 

On a recent trip to Australia, meetings and interviews with journalists, journalism professors and government officials showed widespread enthusiasm for the monetary boost to Australian journalism. Outlets throughout Australia are hiring new reporters. The Guardian added 50 journalists, bringing their newsroom total up to 150. Journalism professors say their students are getting hired and that there are too many job vacancies to fill.

 “The Code brought far more money to new outlets than expected,” said Harry Dugmore, senior lecturer in the communications department 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 happen at different times, but the first contracts may expire in two or three years. Observers note that the staggered expiration dates give the platforms an edge in bargaining and that sector-wide contracts would give the media outlets an advantage.

Facebook however has refused to negotiate with many small outlets as well as two large, quality organizations: The Conversation and the hybrid-funded public service outlet Special Broadcasting Service. This has prompted calls for the government to step in and require them to go into binding arbitration.

“It’s a disgrace that SBS and The Conversation were excluded. It’s time to designate Facebook” said Green MP Sarah Hanson-Young, referring to the process by which the government would require a particular company to negotiate with outlets. So far, no outlets have been designated, suggesting the code worked in encouraging Google and Facebook to come to the table.

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

Under Australian law, a review of the code is underway. A report is expected to be delivered to the head of the Treasury and the minister for communication, urban infrastructure, cities and the arts at the end of September and likely made public in October. Treasury will make  recommendations for changes to the code but it’s not clear whether the recently-elected Labor government will make revising the code a priority. Facebook has reportedly declined to attend review meetings scheduled with government officials last month.

Support across the political spectrum was key

In passing the code, the Green party’s support was key. “If we couldn’t get this done when we had the bulk of the mainstream media on board and political parties in agreement then what hope would we have had in terms of doing anything to regulate the online space?,” said Greens MP Sarah Hanson-Young. 

She noted that the widespread support for the Code came partly from public sentiment that it was time to regulate big tech and partly because the polarization in the US showed what could happen if quality journalism wasn’t given support. The need for reliable information during the Covid pandemic further underscored the importance of strong news media.

The Media Entertainment and Arts Alliance, a union that represents 5,000 Australian working journalists, gives the code qualified support. Yes it has infused money into the system, director Adam Portelli said. “(But) what the current bargaining process lacks is transparency. While there is no doubt that important new funding has been provided to Australian news media companies since the code commenced, the amount and purposes for which these funds have been deployed by media organizations is not known to the public. This plainly inhibits any assessment of the code’s effectiveness.

“One of our major concerns with the code is its failure to specify that funds generated through the bargaining arrangements must be directed to production of journalistic content. Without this, the public cannot have confidence that the code is actually working.”

Nondisclosure agreements are a continuing problem

Misha Ketchell, editor of The Conversation, said that Google was fairly quick to offer a deal but that Facebook simply refused to come to the table. “The other issue that we faced in the early phase of doing the deals was just the information asymmetry in the market. There was no market. We knew nothing. We went to Facebook and Google and said, ‘What do you think is fair?’ And nobody really knew.”

And in Australia, Google and Facebook made outlets sign nondisclosure agreements. My Columbia University colleague Bill Grueskin visited Australia earlier this year and called the code “a murky deal, with critical details guarded like they’re nuclear launch codes.” 

As in many countries, small Australian outlets worried that they would be left out of a bill that would mainly benefit large media houses, particularly the Murdoch-owned outlets. However, in Australia, the bill was designed in a way that meant most of the small outlets were able to secure deals if they banded together to negotiate. This was made possible because the Australian Competition and Consumer Commission provided an exemption allowing collective bargaining by any outlet with an annual revenue of less than $10 million per year. 

Some 84 small outlets that comprise Country Press Australia collectively bargained with Google and Facebook. 

Emma McDonald from Minderoo Foundation’s Frontier Technology initiative spent six months helping another group of 24 outlets  — including multi-cultural, LGBTQI+, outer urban, regional and arts organizations — negotiate an agreement with Google. 

Other countries are looking at adapting and improving upon the Australian code

Australia has kicked the discussion into gear by putting its code in place. And it seems to be working better than its doubters had expected.

The proposed Journalism Competition and Preservation Act sponsored by U.S. Sen. Amy Klobuchar, D-Minn, follows the spirit of the Australian code in getting Google and Facebook to pay for content they use. The JCPA picks up the idea of a form of binding arbitration as a lever to bring both sides to the table and make reasonable offers. However, the JCPA differs in that it doesn’t not allow contracts that keep terms secret from the government. Republicans have objected, saying that money could flow to The Washington Post, New York Times and Wall Street Journal from the bill, whose reporting they consider biased. These outlets already get tens of millions of dollars from deals they have with Google and Meta and are expected to be excluded, along with the biggest broadcast networks, from a final version.

Canada is likely to pass a law similar to Australia’s, with the vote expected in October. Canada’s version improves on the shortcomings of the code, particularly the lack of transparency of deal terms. Under the draft Canadian Online News Act, contract terms will need to be disclosed to the government, but not the public.

Indian and South African officials have said they would consider similar legislation but nothing has been proposed. Swedish media outlets are also discussing whether they can push for a version of the code. Brazil’s proposal to force Google and Facebook to pay for news was torpedoed by Google, Facebook and President Jair Bolsonaro in May, as journalist Patricia Campos Mello explained in an earlier Poynter article. EU nations are using copyright law to get Google and Meta to pay for news. Meta has said recently that distributing news is no longer a priority for the company, though that does not necessarily translate to eliminating news feeds altogether.

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Anya Schiffrin is the director of the Technology, Media, and Communications at Columbia University’s School of International and Public Affairs and a lecturer who teaches…
Anya Schiffrin

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