Google, Facebook and other digital platforms could be forced to pay hundreds of millions of dollars in fines if they fail to comply with the media bargaining code released on Friday by Australia’s competition regulator.
Treasurer Josh Frydenberg asked the Australian Competition and Consumer Commission to develop the mandatory code in April, after negotiations between digital platforms, the ACCC and media companies stalled, and media companies experienced a sharp drop in advertising revenue due to Covid- 19)
Dozens of newspapers have closed since the pandemic began, and hundreds of journalists have been suspended or fired in what has been an acceleration of the crisis facing the news industry.
Frydenberg said Friday that it became clear to the government that no progress was being made in negotiations between the parties on content payment.
He said the code was not about protecting the media from competition or disruption, but about creating a level playing field and ensuring a fair march.
“We want Google and Facebook to continue to provide these services to the Australian community … but we want it to be on our terms. We want it to be in accordance with our law and we want it to be fair. “
The treasurer will decide which companies must comply with the code, but will start with Google and Facebook. The Australian Communications and Media Authority (Acma) will determine the eligibility of media companies.
The definition in the draft code states that they must predominantly create and publish news in Australia, serving an Australian audience, subject to professional editorial standards, and editorial independence from the topic of news coverage, with earnings of more than $ 150,000 per year.
The code would require tech giants to negotiate in good faith to pay the media for the use of their content, and media companies will be able to negotiate as a group with Facebook and Google.
Public broadcasters ABC and SBS are barred from receiving payments through the code, but would benefit from its non-remuneration aspects, Frydenberg said.
If agreement on payments cannot be reached within three months of the negotiation, it can be arbitrated, and the decision must be made in 45 days. If the parties disagree with the arbitrators, Acma’s appointed arbitration panel from a list overseen by the regulator will make decisions on payments based on each party’s submissions.
The code also imposes a number of minimum obligations on digital platforms. This includes providing media companies with information on news-related data, giving at least 28 days advance notice of algorithm changes that affect news ranking: displaying news content and advertising with the content of the news.
The code would also prohibit platforms from discriminating against Australian media covered by the code.
The ACCC may issue violation notices for minor code violations, but for major violations, there are fines of up to $ 10 million per violation, three times the profit earned, or 10% of annual billing, whichever is greater.
ACCC President Rod Sims told reporters on Friday that since Facebook and Google among themselves had billions in revenue in Australia, the penalties could be “up to hundreds of millions.”
Sims said that even if Google deactivated Google News in Australia, as it did in Spain, it would still be captured by the code due to the fact that it published news through search results or on YouTube.
He said Australia’s code would be more successful than other countries’ attempts to get money for publishers because forced arbitration would establish a final decision if the parties couldn’t negotiate, and also prevented Facebook and Google from discriminating against news publishers for participate in the code.
Frydenberg said he was confident that such a scheme would be more successful in making Google and Facebook pay than other countries so far.
“I think this is a better set of recommendations and as a better path in the future than what we have seen elsewhere. It is the product of 18 months of work, extensive consultation, and our law will be established for a more level playing field, ”he said.
Sims said the $ 150,000 threshold for publishers was open to comment as part of the exposure draft process, but did not believe the code would entrench bigger players like News Corp and Nine at the expense of smaller media companies.
“This has to be configured so that smaller players don’t just benefit appropriately, have the ability to grow and prosper and just grow and grow,” he said.
“[For] Players who are small, who don’t have a lot of journalists, who get some form of pay, even at their current level … it’s really important for them to keep what they’re doing right now and allow them to grow.
“I have had many conversations with smaller players. I am sure that this will facilitate their survival, but also their growth.”
Facebook told the ACCC in its presentation that there would be no significant impact on its own business if it were to stop its users from sharing news content in Australia, while affirming that the 2.3 billion clicks it sent to the sites were worth shutting down. Australian news between January and May. to $ 200 million for news publishers.
The company argued that both it and Google had been unfairly selected in the process.
Nine president Peter Costello said in May that Google and Facebook should pay about 10% of the revenue they get from Australia. He based the figure on a finding in digital platform research that tech giants raised roughly $ 6 billion from the online advertising market in Australia in 2018.
Google responded, with its local managing director Mel Silva, saying that in 2019 it made just $ 10 million in revenue from clicks on ads for news-related queries in search results. Silva said Google’s search engine sent 3.44 million visits to publishers “free” in 2018, which was worth more than $ 200 million to Australian publishers.
The ACCC will seek comment on an exposure draft of the legislation, and comments will be sent in late August. Frydenberg said Friday that the legislation would be introduced in parliament soon after.
Sims said he would expect to see payments to news companies within six months of passing the legislation.
The ACCC has also taken legal action against Google on charges that it has misled users about its location tracking, and allegations that it misled users by combining their advertising tracking data with personal information held by Google.
The regulator is also reviewing Google’s acquisition of fitness tracker Fitbit.
