Australia and the Media Bargaining Code
By Adara Manamperi
On February 25th, 2021, the News Media Bargaining Code passed both houses of parliament in Australia. [1] This law, which is the first of its kind globally, was designed by the Australian government and Australian Competition and Consumer Commission in order to address what they call a power imbalance between social media giants (namely Google and Facebook) and Australian news publishers when negotiating payment for news content used on the tech firms’ sites.[2] The code was designed to make up for the loss of advertising revenue that media companies have incurred in Australia due to the posting of their materials on Google and Facebook sites; “for every $100 of online advertising spend, $53 goes to Google, $28 to Facebook and $19 to everyone else.”[3] The code requires news outlets to negotiate commercial deals with either Facebook or Google, and if they cannot come to an agreement, the offer is subject to binding arbitration in which the arbitrator will determine which offer will be the fairest.[4] Notably, if the agreement is broken by Facebook or Google, they could face huge civil penalties of up to $10 million AUD (which is around $7.4 million USD).[5] In addition, the new law also requires that Facebook and Google provide notice to media outlets when they change their algorithms if it affects the order in which content appears on its sites, and consumer user data extracted from news content on its sites too must be shared. [6]
When talks of the code started back in 2020, both Google and Facebook were very unreceptive to the proposed legislation. In August 2020, Google published an open letter detailing how the new regulation would hurt its Australian users. [7] Google, however, a few weeks before the code’s passage, seemed to have changed its stance somewhat by signing a three-year deal with News Corp. entitling the companies brands to enter into an ad-revenue sharing agreement with Google, and be featured in Google’s News Showcase. [8] In August 2020, Facebook stated that if the code were to become law, that they would stop allowing publishers and people in Australia from sharing news on Facebook and Instagram. [9] Fast forward to about a week before the new code’s passage in February 2021, and Facebook held its stance by blocking all local and global news sites to Australian users and blocking Australian publications to global users. [10] From February 18th to February 22nd, publishers and people in Australia were restricted from sharing or viewing Australian and international news content,[11] a move which prompted the Australian government to renegotiate and make amendments to the proposed code. [12] While the original legislation would have forced Facebook and Google to pay media organizations for news content shared on its websites, the Australian “government can now assess whether companies like Facebook have made a contribution to the Australian news industry before deciding where payments are necessary.” [13] In addition, Facebook and Google now have the freedom to make their own deals with local companies, rather than it being overseen at all times.[14] In addition, Facebook too has struck a three-year deal with News Corp. to pay for local articles that appear on its platform.[15]
Now that the legislation has successfully passed, and that Google and Facebook seem to be complying with it thus far, what remains to be seen is how this affects the laws in other countries worldwide. As traditional news media has become a sector which seems to be in a financial crisis, one which is exacerbated by the increase in social media platforms and lack of ad sharing revenues,[16] many other nations are seeing this first of its kind law as a way to help traditional news media outlets survive by adopting something similar.
An Indian MP, Sushil Modi has called for India to implement a law akin to Australia’s code, one which would make it mandatory for big tech companies such as Google, Facebook, and YouTube to pay advertising revenue back to the news content providers of whom they are publishing on their platforms.[17] Lawmakers in the United States are also considering something similar, through the passing of the Journalism Competition and Preservation Act of 2021, which allows “small news outlets to join forces to negotiate as a collective bloc with ‘online content distributors’ such as Facebook and Google for favorable terms.”[18] In addition, Canada has vowed to make Facebook pay for news content, with the Canadian Heritage Minister Steven Guilbeault saying that Canada would consider a similar model to Australia’s code, requiring news outlets and big tech companies to reach deals with regards to content sharing, or alternatively agree to pricing through binding arbitration. [19]
It seems like Australia’s new code is leading the global fight against the loss of advertising revenue that media companies have incurred due to the posting of their materials on big tech’s platforms. It remains to be seen whether or not these agreements allow traditional news media to stay afloat, but it is a response that many news media outlets and organizations have been asking for. If enough countries can adopt something similar, perhaps tech giants worldwide will become accustomed to paying its fair share of its large advertising revenue with the true creators of the content that they are making profits off of by sharing it on their platforms.
#AustraliaMediaLaw #NewsMediaBargainingCode #advertisingrevenueshare #traditionalnewsmedia
[1] Shaimaa Khalil, Facebook and Google news law passed in Australia, BBC News, Feb. 25, 2021, https://www.bbc.com/news/world-australia-56163550.
[2] Jonathan Barrett & Byron Kaye, Explainer: Australia's news revenue-sharing law behind battle with Big Tech, Reuters, Feb. 18, 2021, https://www.reuters.com/article/australia-media-facebook/explainer-australias-news-revenue-sharing-law-behind-battle-with-big-tech-idUKL4N2KO11Y.
[3] Amanda Meade, Australia is making Google and Facebook pay for news: what difference will the code make?, The Guardian, Dec. 8, 2020, https://www.theguardian.com/media/2020/dec/09/australia-is-making-google-and-facebook-pay-for-news-what-difference-will-the-code-make.
[4] Barrett & Kaye, supra note 2.
[5] Id.
[6] Id.
[7] Open letter to Australians, Google, Aug. 17. 2020, https://about.google/intl/ALL_au/google-in-australia/aug-17-letter/#:~:text=Open%20letter%20to%20Australians,-We%20need%20to&text=A%20proposed%20law%2C%20the%20News,use%20at%20risk%20in%20Australia.
[8] Lauren Feiner, Google will pay News Corp for the right to showcase its news articles, CNBC Tech, Feb. 17, 2021, https://www.cnbc.com/2021/02/17/google-and-news-corp-strike-deal-as-australia-pushes-platforms-to-pay-for-news.html. See also Supporting Australian journalism: a constructive path forward, GOOGLE, https://about.google/google-in-australia/an-open-letter/.
[9] Will Easton, An Update About Changes to Facebook’s Services in Australia, Facebook, Aug. 31. 2020, https://about.fb.com/news/2020/08/changes-to-facebooks-services-in-australia/.
[10] James Clayton, Facebook blocks Australian users from viewing or sharing news, BBC News, Feb. 18, 2021, https://www.bbc.com/news/world-australia-56099523.
[11] William Easton, Changes to Sharing and Viewing News on Facebook in Australia, Facebook, Feb. 17, 2021, https://about.fb.com/news/2021/02/changes-to-sharing-and-viewing-news-on-facebook-in-australia/.
[12] Richard Connor, Australia passed media law as Facebook defends news blackout, DW News, Feb. 25, 2021, https://www.dw.com/en/australia-passes-media-law-as-facebook-defends-news-blackout/a-56682488.
[13] Id.
[14] Id.
[15] Scott Neuman, Facebook Reaches Deal With News Corp. Australia To Pay For News Content, NPR Media, Mar. 16, 2021, https://www.npr.org/2021/03/16/977776254/facebook-reaches-deal-with-news-corp-australia-to-pay-for-news-content.
[16] Carmen Arroyo Nieto & Josep Valor, What the almost 3,000 journalism job cuts tell us about the media industry, IESE Business School Blog, Jul. 5, 2019, https://blog.iese.edu/the-media-industry/2019/07/05/what-the-almost-3000-journalism-job-cuts-tell-us-about-the-media-industry/.
[17] Ananya Varma, Sushil Modi Bats For Law Forcing Tech Giants To Pay For News; Cites Australia’s Example, Republicworld.com, Mar. 17, 2021, https://www.republicworld.com/india-news/general-news/sushil-modi-bats-for-law-forcing-tech-giants-to-pay-for-news-cites-australias-example.html.
[18] Kate Cox, US lawmakers propose Australia-style bill for media, tech negotiations
[19] David Ljunggren, Canada vows to be next country to go after Facebook to pay for news, Reuters, Feb. 18, 2021, https://www.reuters.com/article/us-australia-media-facebook-canada/canada-vows-to-be-next-country-to-go-after-facebook-to-pay-for-news-idUSKBN2AI349.