On requiring digital platforms to pay select news companies for links and snippets
Digital platforms—in fact, the open internet as a whole—is built on the premise of being able to link freely between websites. The new law changes that by requiring digital platforms to pay to link to content of and provide special advantages to certain news companies. Here’s what a few submissions have said about this:
- Atlassian: “There is … no corresponding rationale or economic analysis for compelling payment from the digital platforms to the NMBs (News Media Businesses) for the privilege of displaying links to news stories — impressions to online users that the NMBs themselves highly value … No other types of web sites on the Internet are paid in this way, for merely appearing in search results or on social media platforms. Legislation creating ‘government-favoured’ categories of web sites will only disrupt neutrality on the Internet, create a slippery slope for other types of potentially-favored content, and is simply not required to accomplish the policy goals of the ACCC …’’ (Atlassian submission, page 2)
- Sheet Music Boss (YouTube creator): “We do not feel it is fair for news companies to be given special treatment under the law. Why should additional money be paid to news media for their content on Google’s platforms when no other type of creator is given such a privilege?” (Sheet Music Boss, page 1)
On providing special treatment to news businesses over other websites (algorithm notifications)
The new law also forces Google to provide certain news companies with advance notice of any changes we make to the algorithms that help us provide Search results. While the notification period for algorithm changes has been amended in the December version of the Code, shortening the period from 28 to 14 days, these submissions underscore the problematic nature of providing advance notice to any single group of websites:
- Business Council of Australia: “Further, if this model – requiring substantial notification of changes to algorithms – was applied more broadly, it would create a major disincentive to investment across a range of sectors that use similar systems to rank or display content. The Business Council supports regulations that can be realistically implemented. As currently drafted, the requirement to provide 28 days’ advance notice of changes to algorithms ignores the iterative way these types of products are developed or delivered. It would be a handbrake on innovation and improvements to the consumer experience, and it would cut cross existing legislated requirements.” (BCA submission, page 5)
- Momentum Studios: “As you are the Australian Competition and Consumer Commission, I believe you have a responsibility to all content creators to not give news organisations, an incredibly small portion of the content creators on digital platforms, an unfair advantage and a competitive edge.” (Momentum Studios submission, page 2)
On unfair rules to determine payments
A range of submissions, called out the unusual payments and arbitration system (known as baseball arbitration) that’s proposed under the Code:
- Australian Industry (Ai) Group: “The arbitration process appears to encourage ambit claims rather than negotiation. It also appears that the range of factors that arbitrators must consider is very much weighted towards the interests of news organisations.” (Ai Group submission, page 4)
- American Bar Association Antitrust Law and International Law Sections: “The ACCC expects ‘final offer arbitration’ to be ‘used rarely’ but does not provide evidence to support the expectation. If, in fact, such arbitration becomes commonplace, the Code risks transforming the platform-news media relationship from a market-based one into a fully regulated one with little oversight or safeguard. The ACCC should therefore include a mechanism to address issues like this should the practical impact not match the ACCC’s expectations.” (ABAALILS submission, page 5).
On hurting the usefulness of online services for millions of people
Many raised concerns that the new law would harm online services used by millions of people, like Google Search. Quotes on that topic:
- Australian Industry (Ai) Group: “The Exposure Draft of the Treasury Laws Amendment (New Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 if adopted would amount to an unprecedented intervention in arrangements between private businesses. It is an intervention that appears one-sided. It certainly has the potential to substantially add to business compliance costs and could well undermine the quality of services provided by the leading digital platforms to the detriment of users of these services.” (Ai Group submission, page 3).
- Business Council of Australia: “This creates a dangerous precedent and risks global organisations not opening their digital platforms up to Australian consumers and businesses, which will place Australian SMEs at a significant disadvantage to their global competitors. It will also disincentivise domestic innovation and reduce the likelihood that new market entrants will emerge across all sectors, by creating the perception that innovation and success are punished.” (BCA submission, page 6).
On negatively impacting media diversity in Australia
Others, including some news publishers (e.g. Star News Group and John Mellor of GoAuto Media), believe the Code will negatively impact media diversity by favouring larger media companies. Quotes on that topic:
- Star News Group: “Star News Group supports a bargaining code, but is concerned that the draft bill significantly benefits larger media organisations and will reduce the number of newsmedia voices and diversity. This is evident in the proposed arbitration process which will be difficult, costly and intimidating and would seem unnecessary. Small organisations will likely not participate or give up quickly.” (Star News Group submission, page 1).
- Electronic Frontiers Australia: “Australia is already one of the most highly concentrated media markets in the world. The Bill, as drafted, seems to reinforce this level of concentration by excluding (or at least hindering) smaller players and publicly owned entities from financial compensation …” (EFA submission, page 1 and 2).
On harming investment in Australia and the digital economy
The one-sided arbitration rules and the fact this industry Code only applies to two companies (Google and Facebook), have resulted in concerns from businesses and industry groups that the Code might deter future investment in Australia’s digital economy.
- Business Council of Australia: “Legislation should avoid unnecessarily deterring foreign technology companies from establishing and growing their presence in Australia or discouraging local entrepreneurs from taking the leap and investing their time, capital, and creative energies in challenging incumbent business models. Onerous regulatory settings may encourage foreign governments to create barriers to Australian technology exports via tit-for-tat responses.” (BCA submission, page 4).
- Atlassian: “Given its targeted nature and drastic form, the Code may read on the global stage like protectionism for established Australian media at best and open hostility to the tech sector at worst. Businesses considering Australia for further investment may note not only the heavy-handed nature of this law, but will fear the uncertainty of future regulations yet to come.” (Atlassian submission, page 4).
What happens next?
There’s still time to get this right. As the Code is now with a Senate Committee for review before it goes back to Parliament, people who are concerned about the latest version of the law can share their views on the Code with that Senate Committee until 18 January.
Over the next few weeks, we will continue to engage with the Senate Committee, policymakers, and publishers, making our case constructively to achieve a Code that’s fair for everyone, in the interest of all Australians.