The Australian government has released a draft of a proposed code that would see Google and Facebook brought into negotiations to pay media companies for their use of the news content those media companies generate—with binding final-offer arbitration as a last resort.
In a statement published on its website this morning, the ACCC (Australian Competition and Consumer Commission) stated that the code is necessary to address "acute bargaining power imbalances between Australian news businesses and Google and Facebook".
Both platforms have previously come out strongly against the concept. Facebook has argued that the move is discriminatory, while Google has asserted that the value of news to Google is actually very small and that media outlets derive more benefit from the search giant than the other way around.
The code details a protocol for a three-month period of negotiation followed by binding arbitration if the negotiation process fails to result in an agreement. At that point an independent arbitrator would choose which of the two parties’ final offers is the most reasonable within 45 business days. The draft code initially applies only to Google and Facebook, but other digital platforms "may be added if they attain a bargaining power imbalance with Australian news media businesses in the future", the ACCC said. Media organisations can form groups to collectively bargain with the platforms.
Further consultation will take place during August, ahead of the code being finalised shortly after, according to the ACCC.
Prior to drafting the code, the government had given the relevant parties a chance to develop a voluntary code, but stepped in in April when it said "insufficient progress" had been made.
The ACCC, which earlier this week also sued Google over data-collection practices, explicitly rejected Google's argument that the value of news content is relatively small. “News content brings significant benefits to the digital platforms, far beyond the limited direct revenue generated from advertising shown against a news item," Rod Sims, ACCC chair, said in the statement. "News media businesses should be paid a fair amount in return for these benefits."
Sims added that the proposed process is designed to be fair, but also to drive the parties toward resolution. "We believe that our final-offer arbitration proposal provides a compelling incentive for parties to put forward fair and reasonable proposals, given each has just one chance to make an offer, and only one offer can prevail,” he said.
While the process ensures that the cost of producing journalism will be taken into account, the arbitrator is also required to consider whether the media's payment proposals would place an undue financial burden on the digital platforms, Sims added.
The code also addresses some issues not related to payments for news content, saying that these are "standards that digital platforms must meet in their dealings with news media businesses, and cannot be negotiated away":
Digital platforms would be required to give news media businesses 28 days’ notice of algorithm changes likely to materially affect referral traffic to news, algorithm changes designed to affect ranking of news behind paywalls, and substantial changes to the display and presentation of news, and advertising directly associated with news.
In addition, the platforms must give news media businesses clear information about the data they collect through users’ interactions with news on digital platforms; for example how long users spend on an article, how many articles they consume in a certain time period, and other information about user engagement with news content across digital platform services.
The platforms would also be required to publish proposals for how they would recognise original news content on their services. They would also need to provide news media businesses with flexible user comment moderation tools, including an ability to “turn off” comments on individual stories they post to digital platforms.
The minimum standards would also allow news media businesses to prevent their news content being included on any individual digital platform service.
Breaches of these standards would be subject to potential enforcement action by the ACCC.
Campaign Asia-Pacific has reached out to Google and Facebook for further comment.
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