Why the government stepped between Australia's publishers and the digital platforms

Chris Pash
By Chris Pash | 21 April 2020

The federal government has moved, in the middle of negotiations between publishers and Google and Facebook, to force the digital platforms to pay for the news they use. 

Premium publishers have welcomed the move but the digital paltforms point out that the governmnet moved before the deadline to come up with a draft code with the publishers. 

Google says it had engaged with more than 25 Australian publishers since February to get input on a voluntary code, working  to the timetable and process set out by the competition regulator, the ACCC. 

And Facebook says it was due to submit the first draft of a voluntary code in May under the agreed timeframes set by the government in December. 

However, treasurer Josh Frydenberg says here had been "no meaningful progress" in talks on a voluntary code. 

Publishers have seen their audience numbers surge during the COVID-19 crisis but at the same time the advertising market has shrunk as brands withdraw or rewrite campaigns.

"Australia will not be the first country that seeks to hold the digital giants to account and regulate payment for content," says Frydenberg.

The competition watchdog, the ACCC, which ran an inquiry into digital platforms, says there was “no expectation of any (agreement) even being made”.  

Frydenberg says the government decided that the original timeframe needed acceleration. "The Australian media sector was already under significant pressure; that has now been exacerbated by a sharp decline in advertising revenue driven by coronavirus," he says.

The publishers also weren't confident the platforms would get close to a voluntary deal. 

Michael Miller, executive chairman of News Corp Australasia, doesn't believe tech giants would co-operate in good faith on a voluntary model to pay media companies for original content. 

“For two decades, Google and Facebook have built trillion-dollar businesses by using other people’s content and refusing to pay for it," he says. 

"Their massive failure to recognise and remunerate creators and copyright owners has put at risk the original reporting that keeps communities informed. 

“The decisive move by the Australian government to go directly to a mandatory code of conduct between the international tech giants and Australian news media companies is a vital step that can help secure the future of Australian journalism." 

Hugh Marks, the CEO of Nine, congratulated the government for taking swift and decisive action on this important issue. 

"Now more than ever, it’s important the global technology companies take some responsibility for contributing to our society through financially supporting the creation of quality Australian content," he says. 

"We look forward to working constructively with the government to get the settings in place for this to operate in a simple manner." 

Seven West Media CEO James Warburton says Australia is leading internationally on this critical issue. 

"The media industry is dependent on the value of its content being recognised by all users - foreign digital platforms in particular," he says. 

"In the past month our news content alone has reached millions of Australians - it’s only right when this is accessed via third party platforms its creators are fairly compensated.

"We fully embrace the opportunity to work closely with the government and the ACCC to implement this long-awaited action.”

ViacomCBS Australia and New Zealand chief content officer and EVP, Beverley McGarvey: “Having the ACCC develop the code(s) was always the best option as they are the experts in ensuring a level playing field in commercial bargaining environments. We look forward to meaningful discussions with the competition regulator and the government in the weeks ahead. It’s important to remember that digital platforms have been benefitting from all of our program-related content for years so for the code to be truly meaningful it needs to cover all premium content developed by a media company, not just news.”

Joan Warner, Commercial Radio Australia CEO: "We welcome the Government's move to redress the power imbalance between digital platforms and Australian media. We will continue to work constructively with all parties."

Free TV CEO Bridget Fair: “It has been clear from very early on that negotiations for a voluntary code of conduct were essentially a delaying tactic for the digital platforms in the hope that these issues would blow over. Today’s decision is groundbreaking and we are grateful to the Morrison government for their commitment to ensuring that Australians will continue to have access to quality Australian content. Google and Facebook derive huge value from the news and premium content generated by Free TV broadcasters, but their extreme market power means they don’t pay a fair price for it."

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