News media bargaining code details revealed

Mariam Cheik-Hussein
By Mariam Cheik-Hussein | 8 December 2020

The government has unveiled the news media bargaining code after months of consultation with the industry.

The final legislation, which will be introduced to parliament tomorrow, was detailed by treasurer Josh Frydenberg and minister for communications and arts Paul Fletcher this afternoon in a press conference. The code aims to address the “unequal bargaining power” between Facebook and Google and govern how the tech giants will pay news companies for their content.

The code will use final-offer arbitration, which Google lobbied heavily against, if the two parties don’t reach a commercial agreement outside of the code. However, in a concession to the tech giants, the arbiters will need to take into account the benefits news media companies receive from the traffic Facebook and Google provide.

“It’s very important to understand that… we want deals to be struck between the parties outside the code,” Frydenberg says.

“Commercial negotiations that are conducted in good faith, we want those deals to be struck outside the code, and the word coming back to us is that there are deals that may be struck very soon between the parties.”

Both Facebook and Google had previously paused their commercial deals with news publishers in Australia until the code’s implications were made clear. In August, Facebook said it had "no current plans" to announce Facebook News in Australia, while Google AUNZ boss Mel Silva said last week it was "keen" to bring News Showcase to Australia, although it was waiting on details on the final code.

Google previously labelled the final-offer arbitration model, detailed in the draft code in July, as “highly unusual” and “largely untested”. Facebook previously said if the draft news media code was legislated it would stop Australian publishers and users from sharing local and international news on Facebook and Instagram.

The final code will cover the ABC and SBS, but will exclude YouTube and Instagram.

“As Treasurer, I have the authority to designate a service that will be subject to this code, and I will be designating Facebook and Google. The Google Search and Facebook news feed,” Frydenberg says.

“The basis for that designation is the unequal bargaining position between the parties. And to make that designation I take advice from the ACCC, from Treasury and others. Obviously that advice came in the form of an 18-month inquiry that has found that to be the case.”

Another concession to the tech giants is that the period of notice they are required to give to publishers about algorithm changes has been reduced from 28 to 14 days. It has also been restricted to “conscience” algorithm changes that will have significant impact on ranking, rather than the “machine-learning progress” of algorithm changes that happens continuously.

“So, where they have made fair points, we’ve responded,” Fletcher says.

“I might say we’ve also responded to fair points made by the news media businesses. So, the code has evolved. The version that will be introduced into the parliament tomorrow by the treasurer reflects the consultation with all parties, and we believe it’s an appropriate framework against which commercial negotiations can occur between the platforms and Australian news media businesses.”

Legislation for the code will be introduced to parliament tomorrow, and then referred to a Senate committee.

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