24 Sep 2020

News media bargaining code unleashes campaigning

The Australian government’s plan for Facebook and Google to pay news media publishers and share user data has all sides campaigning hard before legislation is introduced to parliament.

The Australian government’s attempt to make Google and Facebook pay for news and share user data has news publishers, digital platforms – and even sporting codes – jostling to have their position heard.

Google has been campaigning across its search and YouTube platforms about the “risk from new Government regulation” while Facebook has threatened to remove all news from its social platforms since the government released its draft news media bargaining code in July this year.

Google and Facebook are actively campaigning against the Australian government’s move to introduce a news media and digital platforms bargaining code, which would force the digital behemoths to pay news companies for content, data and algorithm details

The Australian Competition and Consumer Commission (ACCC) - the regulator leading the Draft News Media & Digital Platforms Mandatory Bargaining Code - continues to defend its position.

What’s all the fuss about this news bargaining code?

The Australian government believes Google and Facebook - who not only dominate search and social but own other platforms like WhatsApp, Instagram, Mapping technology, Android devices and YouTube - have an unfair advantage against local news media publishers.

The mandatory news media bargaining code has a concepts paper explaining the complex issues at play.

The news media bargaining code is designed to redress the imbalance between the news media publishers - who pay to create news media content in the public interest - and digital giants like Facebook and Google, who monetise and distribute news content without paying copyright fees.

Google was paid $4.3 billion and Facebook was paid $674 million by Australian advertisers in 2019. By contrast, SMI data showed Australian magazines earned $88 million in the same year and traditional publishing revenues continue to decline while the platforms grow.

Technology change, the rise of smartphones and the decline of print-based publishing means news media publishers are dependent on Google and Facebook as essential business partners. The tech giants effectively enable news publishers to build their audiences online through search and social media.

“This imbalance has resulted in news media businesses accepting less favourable terms for the inclusion of news on digital platform services than they would otherwise agree to,” the ACCC has said.

The code and its planned legislation - which does not yet have a date to be enacted - could up-end the current news media and digital advertising model, potentially changing:

  • How news media content is funded and created;
  • Existing advertiser pricing to reach audiences;
  • Public understanding of the algorithms that allow news content to be displayed in social feeds and search engines;
  • Privacy and consent arrangements around user data and how it can be shared between digital platforms and news publishers.

The pain points for Google and Facebook on the news media code

Google and Facebook naturally aren’t happy that governments want to step in and regulate. The main points of contention from Google and Facebook’s perspective on the news media bargaining code are:

  • Paying a fee to the news media business whose articles appear on Facebook or Google. It’s still not clear how much these payments will be nor exactly how it will be negotiated;
  • Forcing the large digital platforms to give news publishers 28 days warning to algorithm changes that affect the ranking or visibility of news on Facebook and Google. The digital giants believe their algorithms are commercial in confidence and should remain so;
  • Forcing the digital giants to share the user data they collect on people who interact with news content from publishers;
  • Issuing fines and compulsory arbitration if the digital platforms and news media outlets can’t agree on negotiations;
  • Creating penalties of up to 10% of Google or Facebook’s annual revenue in Australia should the code be breached.

The ACCC defines news media content as “journalism with the primary purpose of recording, investigating and explaining issues of public significance”.

What’s more, a news source doesn’t have to be a traditional publisher, but can be a “program of audio or video content designed to be distributed over the internet”, such as a podcast or perhaps sporting codes or even arts companies.

Interest from the digital marketing industry

Direction on the penalties, payments and data sharing arrangements between news organisations and digital platforms is likely to give more clarity to the ever-changing digital marketing landscape.

At this stage only Facebook and Google are covered by the code, though the ACCC has suggested other digital platforms could end up being bound by the code.

For example, if an existing platform (think Twitter, Pinterest or something like Tik Tok) or a new platform attained “a significant imbalance in bargaining power in their relationships with news media businesses”, then those platforms could be subject to the same rules as Facebook and Google.

Industry consultation on the controversial code - which the entire world has been watching - saw 43 different groups, including non-traditional media stakeholders like the National Rugby League, make submissions before the August 28 deadline.

There is no clarity yet on how the new code might redistribute the Australian digital advertising and publishing market, which was worth around $9.4 billion in total (most of which goes to Facebook and Google) according to the 2019 IAB Australia Online Advertising Expenditure report.

Why ADMA will be watching closely

The marketing industry sees value in all positions on the mandatory code and is particularly keen to see what happens with information about algorithms, data privacy rules and how user consent will be handled under the regulations.

Facebook and Google offer news publishers increased traffic and access to highly targeted marketing, while news content gives the digital giants more time on their platform and quality engagement that’s crucial to a functioning democracy (and their ability to sell advertising).

Gaining transparency over how news content will rank in search or social feeds could potentially change how advertising is measured and priced, which has market implications for the entire industry.

Both news media and digital platforms like Google and Facebook are in a symbiotic relationship that brings benefits to both sides - it will be interesting to see how far that mutuality can stretch now that the government has made it clear that it is prepared to act.

Need more info?