The Australian Government recently announced amendments to the Competition and Consumer Act 2010 – commonly referred to as the “News Media Bargaining Code.” These amendments were vehemently opposed by Facebook and Google due to disagreements on renumeration and the legislation’s influence on their future negotiations. Although Google conceded, Facebook restricted access to Australian news on its platform. The deadlock was eventually resolved through discussions, which returned a modicum of decision-making power to Facebook. The legislation was passed by Parliament on 25 February 2021.
Effect on the Competition and Consumer Act
In April 2020, the Australian Competition and Consumer Commission (“ACCC”) was tasked with creating a mandatory code of conduct to address “a fundamental bargaining power imbalance” (Treasury Laws Amendment Bill 2021 (Cth)) between Australian news media businesses and social media giants: Google and Facebook. The reasoning was that Google and Facebook both had user bases much larger than that of Australian news outlets, making the giants “unavoidable trading partners” (Treasury Laws Amendment Bill 2021 (Cth)). Subsequently, Australian businesses have had to accept less favourable commercial deals. One such disadvantage is the inability of Australian publications to “receive payment for the inclusion of their news content” (Treasury Laws Amendment Bill 2021 (Cth)) in Google and Facebook’s services.
The legislation sets out four main requirements for negotiations between digital platform corporations and news publications: bargaining rules, compulsory arbitration rules, minimum standards, and non-discrimination requirements. The requirement that generated most debate was compulsory arbitration rules, which stipulated that if “parties cannot come to a negotiated agreement about renumeration,” there would be an “arbitral panel” (Treasury Laws Amendment Bill 2021 (Cth)) to select between two final offers from each party. Due to these amendments, the new legislation would influence negotiations between Australian news outlets and service platforms.
Responses of Google and Facebook
In light of the legislation, Google and Facebook had different responses. Google initially opposed the legislation, but the firm quickly conceded to licensing deals with Australian news outlets through Google News Showcase – a program that allows Australian outlets to “curate their stories across Google services” and increase revenue through “regular payments from Google” (Silva, n.d.). For example, Google News will be proliferated with news content curated “directly by news publishers” (Silva, n.d.). The program has been joined by prominent newspapers, such as The Canberra Times and The West Australian. In sum, Google expresses a positive sentiment in working with Australian stakeholders to shape the future of news and helping economic recovery in Australia.
In contrast, Facebook disagreed with the legislation, stating that the proposed law “fundamentally misunderstands the relationship” (Easton, 2021) between Facebook and publishers who share content. Facebook claims that, unlike Google, publishers “willingly choose to post news on Facebook” (Easton, 2021). News content forms “less than 4%” (Easton, 2021) of the content seen on users’ Facebook News Feed, providing evidence for their opposition to the Australian government’s premise for amendments. Subsequently, Facebook blocked both Australian and international users from viewing or sharing Australian or international news. On the side of Australian news publishers, they were restricted from sharing or posting any content. Facebook’s actions resulted in public outcry, lending the New Media Bargaining Code international scrutiny.
Resolution and Wider Implications
Through discussions between Facebook and the Australian government, the conflict was settled by further amendments. Specifically, Facebook will “retain the ability to decide if news appears on” their service (Murphy, 2021) to prevent any potential power asymmetry in favour of the non-Facebook party during negotiations, which the initial legislation could encourage. Despite this resolution, Facebook maintains an adversarial stance towards “regulatory frameworks that do not take account of the true value exchange between publishers and platforms” (Easton, 2021). Facebook’s success in gaining concessions demonstrates a precedence where social media giants, which are private sector firms of the United States, can influence foreign government legislation. Meanwhile, Australia’s regulatory framework acts similarly as an example for other democratic countries who face this dilemma. As more governments, such as those of the European Union, are seeking to reign in big tech, Australia’s legislation is undeniably relevant.
References
Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2021 (Cth). https://www.accc.gov.au/focus-areas/digital-platforms/news-media-bargaining-code/final-legislation
Easton, W. (2021, February 22). Changes to sharing and viewing news on Facebook in Australia. Retrieved March 24, 2021, from https://about.fb.com/news/2021/02/changes-to-sharing-and-viewing-news-on-facebook-in-australia/
Murphy, H. (2021, February 23). Facebook strikes deal with Australia to restore news on its platform. Retrieved March 24, 2021, from https://www.ft.com/content/360b0419-83b4-4bcb-b7a3-495be92723fc
Sergi, S. (2021). Untitled [Photograph]. Unsplash. https://unsplash.com/photos/E6wXmrJWW8o
Silva, M. (n.d.). An update on the News Media Bargaining Code. Retrieved March 24, 2021, from https://about.google/google-in-australia/an-open-letter/
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