The federal government has released a draft mandatory code for digital platforms to pay publishers.
The draft code, created by the Australian Competition and Consumer Commission (ACCC), aims to address the bargaining power imbalance between news businesses and Google and Facebook, including through a binding “final offer” arbitration process.
If the digital platforms and media companies can’t reach a deal through a formal three month negotiation and mediation process, then an independent arbitrator would choose which of the two parties’ final offer is the most reasonable within 45 business days.
“This would ensure disagreements about payment for content are resolved quickly,” the ACCC says.
“Deals on payment could be reached within six months of the code coming into effect if arbitration is required.
“The draft code would also allow groups of media businesses to collectively negotiate with the platforms. This could include, for example, regional and community mastheads.”
The code also includes a set of "minimum standards” for the tech giants. This includes providing advance notice of changes to algorithmic ranking and presentation of news, appropriately recognising original news content, and providing information about how and when Google and Facebook make available user data collected through users’ interactions with news content.
Discussions will take place throughout August on the draft report before legislation is introduced next month.
Treasurer Josh Frydenberg, who announced the draft code this morning, says it is about a "fair go" for Australian news businesses.
"We are confident we will be able to implement this legislation," Frydenberg told a media briefing.
The giant digital platforms have been taking an increasing share of digital advertising dollars and publishers, such as News Corp and Nine Entertainment, argue they should be paid for the display of their premium content on the platforms.
Google has previously said its direct economic value from news content in search is small, generating about $10 million in revenue from clicks on ads against possible news-related queries in Australia.
The treasurer described an "unequal bargaining position" between Australian news media businesses that produce original content and the digital platforms.
“Nothing less than the future of the Australian media landscape is at stake with these changes," says Frydenberg.
He says the government acted because it became apparent there was little progress on the critical issue of payment for content.
“Hence we are moving down the path of a mandatory code," he says.
"A mandatory code that governs those relationships and covers issues such as access to user data, the transparency of algorithms used by the digital platforms for the ranking and the presentation of media content, as well as of course payment for content.”
“We want Google and Facebook to continue to provide these services to the Australian community which are so much loved and used by Australians.
“But we want it to be on our terms. We want it to be in accordance with our law. And we want it to be fair. And that is what has motivated us with this mandatory code.”
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