4.1
This chapter discusses the growth of digital platforms, the impact on regional newspapers as a result of this growth and the development of the News Media and Digital Platforms Mandatory Bargaining Code (the Code).
Digital platforms and regional newspapers
4.2
As outlined in Chapter 3, the transition from a print to online platform has resulted in significant challenges for regional newspapers to continue to attract advertising revenue in the face of an increasing shift online.
4.3
Meta (Facebook) suggested that the challenge on the shift online may have been exacerbated for regional newspapers due to scale:
This challenge may be exacerbated for rural and regional news publishers who may not have the same scale of audience that metro publishers have to navigate structural industry changes.
4.4
The Australian Competition and Consumer Commission (ACCC) described digital platforms as ‘applications that serve multiple groups of users at once, providing value to each group based on the presence of other users’ and consist of groups or individuals who can use the services of the same application for different purposes.
4.5
Some of the most significant digital platforms used in Australia include Google Search, Meta, YouTube, and Instagram. The ACCC said that users spend a significant amount of time on these digital platforms each day:
Not only are these digital platforms used daily, they are used for significant amounts of time each day. Facebook’s 17 million Australian monthly users spend an average of 31 minutes a day on Facebook. Australian Instagram users spend an average of seven minutes a day and Australian Google users (excluding YouTube) spend an average of 23 minutes a day on these respective platforms.
4.6
Google Australia said that it had a strong interest in supporting diverse, sustainable and quality news providers:
Since 1998, Google’s mission has been to make the world’s information universally accessible and useful. Tools such as Google Search enable people to find diverse sources of news and information from a range of sources on the web. That is why we have a strong interest in supporting a diverse and sustainable ecosystem of quality news providers.
4.7
Meta said that news publishers derived significant commercial value by sharing content on Facebook, in turn ‘driving traffic to their owned-and-operated websites, and from the monetisation opportunities we provide for the content they choose to share’:
This includes: free publication and opportunities for potential distribution, customised commercialisation products, and a variety of nonmonetarydata insights that enable further refinement of their publishing strategy. All evidence indicates that the value exchange from the content that publishers choose to share on our services favours publishers.
4.8
The News & Media Research Centre at the University of Canberra (NMRC, UC) found that Australians find their way to online news through a number of pathways, including directly to the website or app of the news organisation, through Google and other search engines or via social media.
4.9
NMRC, UC said that of those who indicated they accessed news regularly, which comprised 88 per cent of respondents, 23 per cent accessed local social media sites to access local news. An additional 47 per cent said they had joined a social media group to get local news.
4.10
Of those that participated in the Committee’s online survey, 55.32 per cent of participants indicated that they had accessed news through social media in the past seven days. In addition, 27.30 per cent of respondents indicated that social media was where they found issues of importance to their local community represented most.
4.11
In the Australian Communications and Media Authority’s (ACMA) 2021 report Communications and media in Australia: How we use the internet, 99 per cent of regional Australians accessed the internet – an increase of 11 per cent compared to 2019 data – and 81 per cent of respondents indicated they had accessed news online in 2021.
4.12
In its Digital News Report: Australia 2021, NMRC, UC found that a number of older Australians were moving towards accessing their news through social media rather than more traditional news sources, which was due in part to growth in the use of mobile phones to access news; in 2021, 45 per cent of Australians used their mobile phone for this purpose.
4.13
As outlined in Chapter 3, advertising is one of the dominant forms of income for news organisations, and the shift to online advertising has been particularly damaging. The ACCC suggested that the business users of Google and Meta were also their competitors, which brought into question whether Google and Meta could give themselves advantages by ‘favouring their own products.’
4.14
The ACCC said news media businesses benefited from the reproduction of news content, but that news media relied on digital platforms leading to accepting less favourable terms to ensure their content was available:
The ACCC’s Digital Platforms Inquiry final report recognised that news media businesses, consumers and digital platforms all benefited from the reproduction of news content in snippets. However, the report concluded that individual news media businesses needed and relied upon digital platform referrals more than the platforms needed and individual news media businesses content. This power imbalance meant news media businesses of all sizes accepted considerably less favourable commercial terms than they otherwise might accept relating to the availability of their content on each of these platforms.
Establishment of the News Media Bargaining Code
4.15
One of the key conclusions of the ACCC’s inquiry into digital platforms centred around the inherent power imbalance between news companies and digital platforms like Google and Meta. The ACCC was directed to work with digital platforms and Australian news businesses to implement a voluntary code of conduct.
4.16
In its progress update in May 2020, the ACCC noted that while discussions had taken place, progress on a voluntary code had been limited and it was unlikely an agreement would be reached. In April 2020 the ACCC was directed to develop a mandatory code of conduct.
4.17
In March 2021, the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021 (the Act) came into effect which established a mandatory code of conduct enabling news businesses to bargain individually or collectively with digital platforms for the inclusion of news on platforms and services.
4.18
Through amendments to the Competition and Consumer Act 2010 (Cth), the Treasurer was given the power to designate Meta and Google to comply with the Code where it was determined that there was a significant bargaining power imbalance between Australian news businesses and the relevant digital platform.
4.19
In order to be eligible to participate in the Code, a news business is required to register with the ACMA as long as certain criteria is met. The tests that must be satisfied include:
the annual revenue of the news organiation must be above $150,000 for the most recent year and for at least three of the five most recent years;
the corporation must have the primary purpose of creating and publishing core news content;
the corporation operates predominately in Australia for the dominant purpose of providing news services to Australians; and
the news services provided by the business must be covered by professional standards and have editorial independence from the subject of its news coverage.
4.20
The ACMA said that 28 news organisations had been assessed and registered under the provisions of the Code:
…as at 25 February this year we'd received 41 applications to register news media bargaining businesses. We'd completed our assessment on 35 of those. From them, 28 were found eligible and have been registered and seven of those were found to be ineligible against the criteria set out in the legislation. The remaining six are still under assessment at the moment.
4.21
Where a digital platform is designated, it must participate in the Code. The Code provides that news providers may undertake bargaining to reach an agreement, participate in mediation if an agreement has not been reached within 3 months, or enter into arbitration.
4.22
Evidence to the inquiry suggested that being registered as an eligible business under the Code does not provide any weight when small providers attempt to negotiate with digital platforms like Meta and Google. For example, Croakey Health Media said that despite meeting the legislative criteria, Meta and Google would not negotiate with them:
We are listed on the ACMA register as an eligible business under the Code; however, we do not expect it will result in any revenue. On 21 December 2021, Meta (Facebook) executives directly advised us they would not enter into a contract with us under the Code. Google has not officially replied to our correspondence, but we have heard indirectly that they do not intend to enter into a deal with us.
4.23
No digital platforms had been designated at the time of the Committee’s inquiry. The ACMA confirmed that the obligation to negotiate was only enacted at the time a digital platform was designated:
To date, no digital platform has been designated under the Bargaining Code. As a result, the Code’s obligations do not currently apply to any digital platform or news business. Businesses are still able to register with the ACMA for participation in the Bargaining Code prior to the Treasurer making a designation.
4.24
The ACCC considered that the voluntary agreements reached demonstrated the Code was having the appropriate effect:
Following the passing of the legislation and the introduction of the Code, and because of this, Google and Facebook have reached voluntary commercial deals with a significant number of news media organisations. While the Treasurer has not designated any digital platforms or services to date, the existence of the Code and the threat of designation is having the appropriate impact.
4.25
Several submitters suggested it was difficult to assess the effectiveness of the Code due to the confidential nature of the voluntary agreements reached. The ACCC indicated that transparency would be improved if the Code had operated as originally intended:
Had someone been designated under the code—for example, Meta—and had they engaged in arbitration, the ACCC would have participated in the arbitration process. We could make submissions to the arbitrators. We could see the offers that were being made as part of that process, so we would be able to contribute. We would be able to see a broad range of deals and contribute to that arbitration process in terms of determining its outcome. Obviously, that hasn't happened, because no-one's been designated and we don't have any visibility of the commercial deals. So what was envisaged under the legislation hasn't eventuated.
4.26
On 28 February 2022, the Government announced that the operation of the Code would be reviewed in line with the statutory provisions of the Act.
Impact of the News Media Bargaining Code
Initiatives introduced by digital platforms
4.27
In response to the introduction of the Code, both Google and Meta have entered into commercial agreements with a range of news media businesses – discussed further below. The details of the agreements are confidential and the conditions agreed are unknown.
4.28
Prior to the introduction of the Code, in 2017, the Meta Journalism Project was launched, which was described as a tool to establish stronger ties between Meta and news organisations:
We will be collaborating with news organisations to develop products, learning from journalists about ways we can be a better partner, and working with publishers and educators on how we can equip people with the knowledge they need to be informed readers in the digital age.
4.29
The Department of Infrastructure, Transport, Regional Development and Communications (the Department) described the project as an umbrella initiative incorporating a series of programs, tools and partnerships:
Individual components of the project include:
a global accelerator program incorporating training and grant funding elements;
a grant funding program to support local news, offered in partnership with the Lenfest Institute for Journalism;
a grant funding program intended to support journalists during the COVID-19 pandemic;
a placement program for journalism students;
a third-party fact-checking program;
partnerships with news organisations; and
tailored guidance and tools for journalists and news businesses.
4.30
As part of this initiative, Meta announced a $15 million Facebook Australian News Fund which provided funding for two grant programs over three years facilitated with the Walkley Foundation; the Newsroom Sustainability Fund and the Public Interest Journalism Fund:
The Newsroom Sustainability Fund will allocate AU$2.5 million per year over three years, in grants of up to AU$250,000 to fund regional newsrooms and digital-first publications. Funding will go towards innovation and revenue-generating projects, such as subscription paywalls and membership program development.
The Public Interest Journalism Fund will also allocate AU$2.5 million per year over three years, providing grants of up to AU$120,000, to small, regional publishers and independent journalists to fund news projects of public interest value and to encourage media diversity. We are particularly focused on how the fund could provide support for underserved communities – such as Indigenous Australians, LGBTQI+ community, youth and women’s issues, rural affairs and local civic journalism.
4.31
Applications for the first year of grants closed on 26 November 2021 and a list of recipients was published in March 2022, with 54 publishers receiving funding.
4.32
Meta has also conducted additional joint initiatives with the Walkley Foundation since 2019:
Over the past two years, joint initiatives between the Walkley Foundation and Facebook have supported more than 30 Australian newsrooms through programs such as the reader revenue Accelerator, the AU$1 million COVID-19 relief fund and the most recent Accelerator alumni grants, awarded in August this year.
4.33
Meta also indicated they had developed a three-year innovation fund in collaboration with Country Press Australia (CPA):
Country Press Australia Newsroom Sustainability and Digital Transformation Fund:
A three-year innovation fund to support newsroom sustainability and digital transformation as part of which CPA distributes the funds annually to its members as grants based on applications by those members.
4.34
The Google News Initiative was launched in 2018, and as part of the program Google has worked with smaller publishers to transform the way they do business:
We have worked with smaller publishers on digital transformation, built data maturity programs for larger news organisations, and partnered with journalists to fight the spread of misinformation across the region, with a special focus on first-time, mobile-first users. These programs were built from the ground-up in partnership with journalists, news organisations and industry associations -those who best understand the challenges and opportunities for news in [the Asia-Pacific region].
4.35
As part of the Google News Initiative, Google developed the following programs:
a business model research project in partnership with the Walkley Foundation to build strategic plans for their digital future and boost their online profile;
a program to accelerate the digital transformation of existing regional news publishers through digital publishing best practice and implementing technology to drive revenue through advertising and reader subscriptions; and
a training program on areas like audience measurement and reader revenue.
4.36
Google Australia said that its Google News Showcase launched in February 2021, which involved paying publishers to produce editorially curated content for ‘limited free user access to paywalled content’. Google Australia said that it had provided opportunities to a number of regional publishers both directly and through CPA:
Some of our partnerships have been developed directly with regional publishers, including the deal we struck with the Times News Group that involved seven of its small regional newspapers in Victoria coming into News Showcase. We also negotiated an in-principle agreement with Country Press Australia enabling us to collectively bargain with their regional publisher members.
4.37
Google Australia has also launched a Digital News Academy with News Corp Australia to begin in the first quarter of 2022, which will incorporate online tutorials, formal education, an annual conference and a United States study tour. Google Australia said that the Digital News Academy would create new opportunities for emerging journalists:
…the Academy will also create opportunities for young journalists, funding 60 new 12-month journalism traineeships in regional Australia over the next three years. In total, the initial roll out will see 750 local and regional news professionals take part over the next three years. The trainees will be drawn from News Corp Australia and a range of small and regional publishers, including Australian Community Media and National Indigenous Times. Smaller publishers from across Australia will be invited to participate. Google has made it a priority to ensure that the Academy will include smaller local and regional organisations.
Benefits to larger newspapers with a regional news presence
4.38
Of the printed news services operating in regional Australia, three companies have been cited as owning high proportion of news services; News Corp, Australian Community Media (ACM), and Seven West Media.
4.39
Providers such as ACM have already negotiated agreements with Google and Meta and are beginning to see benefits. However, ACM noted that compensation received does not comprise a significant component of total annual revenue:
The compensation from the platforms is significant and a vital part of our revenue mix. It should be noted, however, that it is far short of the amount of revenue lost to our newspapers through digital disruption, the migration of key advertising categories such as cars and jobs, and the dominance of the platforms themselves.
The details of the agreements are confidential, however, the total is less than five per cent of our total annual revenue.
4.40
The ACCC suggested that the Code has resulted in new forms of investment for News Corp and Seven West Media:
News Corp has reportedly re-invested in its local news strategy, including the announcement of additional roles in regions and communities. Seven has also reported the money used from its deal would be invested in journalism, particularly commenting on their continued investment in regional and community newspapers and sustainability.
4.41
Ms Clare Gill, Head of Regulatory and Government Affairs, Seven West Media said that Seven West Media was the first to make a deal with Google after the Code was introduced:
The terms of it are highly confidential, so I can't go into the spread. But I can say that we have agreements with both Facebook and Google, and that Seven West Media was the first to strike a deal with Google under the looming news media bargaining code. But I do want to stress that it wouldn't have happened without the government intervention.
4.42
However, the NMRC, UC said that deals made under the Code had not prevented the closure of titles by larger publishers:
On the face of it, this appears to be a good thing, but these deals cover only a fraction of the hundreds of regional and rural newspapers across Australia. However, in the case of News Corp and ACM, there have been announcements of reductions in print services and staff losses from regional mastheads despite having signed deals with one of the digital platforms.
4.43
Mr Hugh Martin, Head, Regional, Rural and Emergency at the Australian Broadcasting Corporation (ABC), said that the deal made as a result of the introduction of the Code would allow a significant number of new roles in regional Australia:
In general terms, we are adding something in the order of 50 new roles in regional Australia, with a focus on public interest journalism, as a result of the income that the ABC has received through this news media bargaining deal. They're direct, new roles added to the reporting efforts that we have under way in regional Australia. Some of those roles have been added to some of our smaller bureaus—for example, Burnie in northern Tasmania and Horsham in western Victoria—but many of those roles are going into new locations where we've previously never had ABC reporting.
4.44
While the Special Broadcasting Service (SBS) has been able secure a commercial deal with Google, the Public Interest Journalism Initiative (PIJI) said that Meta has declined to negotiate with SBS:
…with the legislation currently dormant, the digital platforms can elect which news media to negotiate with, as seen by Facebook's lack of engagement with SBS—one of the most trusted news sources and producers of public interest journalism.
4.45
Dr Alexandra Wake, President of the Journalism Education and Research Association of Australia (JERAA), said that while the additional jobs flowing out of funding from digital platforms to the ABC and News Corp was a positive outcome of the Code, it wasn’t enough to address the needs of regional Australia and local communities.
4.46
The PIJI said that the limited information available about deals made following the introduction of the Code indicated that the majority of deals seemed to favour well-established, large or medium news businesses.
The experience of smaller news services
4.47
The NMRC, UC said that based on public announcements, a number of deals had been negotiated by regional newspaper companies with Google and Facebook:
For example, Google has struck deals with Country Press Australia (70 regional mastheads), the Victorian-based Times News Group (Surf Coast Times, Bellarine Times, Armstrong Creek Times, Ballarat Times, Golden Plains Times, Geelong Times, and Bendigo Times); and News Corp (which will reportedly be used to fund 20 regional positions and the trial of three regional print editions for Sunshine Coast Daily and Mackay’s Daily Mercury). Facebook has negotiated deals with Australian Community Media (40+ regional, rural, and suburban mastheads including the Newcastle Herald, Canberra Times, Bendigo Advertiser, The Advocate, Katherine Times, Illawarra Mercury).
4.48
CPA received approval to negotiate on behalf of almost 180 regional newspapers in August 2021 and has secured deals with both Google and Meta where all but one member has opted-in:
We have agreements with both Facebook and Google. We initially had every member, except one, opt in with Google, and that one member that didn't opt in had done their own agreement. We've had some members opt out since, and that's mainly around some of the requirements that are built into those agreements by the digital platforms. I think we had every member opt in to the agreement with Facebook.
4.49
Country Press NSW said that the deals negotiated by CPA would ‘go some way to helping qualifying publishers recoup the costs of producing extra content for online’ but noted that the deals had ‘mostly yet to be completely finalised’.
4.50
Gilgandra Newspapers said the Gilgandra Weekly was part of the deal agreed by CPA and said that it has required them to increase normal weekly output to meet online content criteria:
One of these deals has only recently commenced, so it is hard to comment on the success at this early stage. It does, however, have an implication on staffing and content production, as the deal requires us to increase our normal weekly output of content to provide a certain daily number of articles for online. This may lead to a new employment opportunity to manage the digital content production.
4.51
Country Press NSW said that many small publications would not qualify for some deals with tech companies due to the quantity of online publishing required. The Bugle said that it had investigated options offered by digital platforms but did not consider that the additional revenue would offset the expectations from digital platforms to participate in the programs.
4.52
The McPherson Media Group said that if the agreements with the digital platforms are fully implemented they would expect the revenue to fund 25-30 per cent of their editorial wages.
4.53
Mr Damian Morgan, Director, Today News Group said that funding received through the Code had made a significant difference, but that there was more work to be done:
It's only very early days, so there are still some pieces to work through. But it gives us great encouragement, and the revenue that promises to come will be very helpful, yes. It's not a silver bullet, it's not a model on which you're going to sustain a business, but it is one of those many things that I've just alluded to that need to happen in a changing environment to increase our ability to be viable and successful.
4.54
Following the commencement of the Code, the Public Interest Publishers Alliance (PIPA) formed to collectively bargain with Google and Meta. PIPA said Google Australia had been engaged in the process, but Meta had directed them to grants programs that had closed:
Google’s Australian representatives have been very engaged in the process from the outset and we are having meaningful discussions with them – collectively and in some cases individually. It is fair to say that – at the time of writing this submission – although it is very much on their terms, progress is being made.
…
Facebook, on the other hand, directed us to their Australian News Fund, comprised of the Newsroom Sustainability Fund and the Public Interest Journalism Fund, both of which are managed by the Walkley Foundation. Applications closed at the end of the week they directed us there – and the next round of applications won’t open again until later this year. These grants, which are only available on a one-off basis, can only be spent on third party digital focused vendors and cannot be used for the operational expenses of operating a small publishing business.
4.55
The Herald Publishing Company said it was not reasonable to expect small publishers to commit the same resources to address the requirements of the Code as larger publishers:
Due to the current economic climate, the Herald has no capacity to commit staff hours to non-core business… It is not feasible to expect small, independent businesses, to be able to commit the same resources to implementing the Code as the media giants like News Corp and 7West Media did with the tech giants Google and Facebook (assisted of course by the federal government’s threat to the digitals of harsh compliance legislation and penalties).
4.56
Mr Ross Lanyon, Managing Director of the Elliott Newspaper Group said that the collective bargaining process allowed them to negotiate more effectively:
That was an excellent agreement between Country Press Australia and the federal government and the ACCC, and that's allowed us to play on such a big scale with the ability to punch, I would say, well above our weight. We were very lucky to have some pretty knowledgeable people from a number of newspapers throughout Australia who volunteered their time, working on our behalf, to be able to deal with Facebook and Google on a basis that gave us equal footing when we were sitting in a room with them. So I think that will end up being a great result, hopefully for all independent newspapers across Australia.
4.57
PIPA said that 50 per cent of their members had successfully registered, but they were concerned this did not influence Google and Meta in their engagement with them:
The registration process is time consuming, and some of us simply don’t have the resources to make the application, produce public interest journalism every day and run our small businesses.
…
It is unclear what the purpose of the ACMA register is if Google and Facebook do not accept that businesses on the list are Public Interest Publishers and are in no way compelled to negotiate with accredited publishers.
4.58
NMRC, UC said that the $150,000 annual income rule needed to be evaluated because it excludes small regional and rural news outlets from negotiations. The Murray Bridge News suggested that a revenue threshold of $75,000 per year – in line with the current threshold for goods and services tax (GST) – would be more appropriate.
4.59
The Star News Group said that deals under the Code come with significant additional costs:
The monies being provided by the Digital Platforms have been commercial agreements and require added resources and costs. The deals are not simply payments for existing content using existing infrastructure. We have added numerous journalism resources, infrastructure and software development to be compliant with the requirements of the agreements.
4.60
The JERAA suggested that research was needed on the impact of the Code on regional media:
Further, research needs to be done on how the code has affected the viability of regional media in Australia’s news ecology, including what types of regional and rural publishers have failed to benefit from negotiations and why, and how the exclusion of some publishers who have an important regional role (e.g. SBS, small independent titles) will affect their capacity to respond to regional community needs. It is also crucial to analyse whether deals under the code have had any impact on either the scale of reporting of critical local news e.g. councils and state govt, rural land and water planning, health and industry development, or the scope of regional media diversity (e.g. publishers, news sources, diversity of reporters).
4.61
CPA said ongoing commitments were needed by digital platforms to ensure the ‘full monetary commitment is provided to reflect the time and effort required by publishers’.
4.62
The University of Technology Sydney (UTS) Centre for Media Transition (CMT) said that weighting needed to be devised for small and regional publishers and the content produced, and further transparency was needed to ensure funds were being used for the production of journalism:
Before the final form of the News Media Bargaining Code was decided, CMT had concluded that some weighting needed to be devised for small and regional publishers taking into account public affairs content, localism, originality, ownership and organisational capacity, in order to create - if not a level playing field - then some semblance of fairness.
Given the non-transparent nature of the deals negotiated with news media organisations or their umbrella associations, it is impossible to know whether revenue is being expended on the maintenance or expansion of regional services, and how much is being allocated to the production of actual journalism.
Developments in digital platforms and news media bargaining
4.63
The Code has been in place since March 2021, and as mentioned above a review of the Code was announced on 28 February 2022. The terms of reference for the review provide that the Department of the Treasury will:
assess the extent to which the Code, during its first year of operation, has delivered outcomes consistent with its policy objective; and
identify potential improvements to the Code.
The review will not revisit the policy objectives of the Code.
Initially, and subject to the results of consultation, the review will assess the extent to which:
commercial agreements between digital platforms and Australian news businesses;
the designation provisions in Division 2 of the Code; and
the registration provisions in Division 3 of the Code;
have delivered outcomes consistent with the policy objectives of the Code.
4.64
The ACCC said that information around the voluntary agreements could be obtained by the Department of the Treasury as part of the review:
It will be Treasury's review, so obviously it will be up to Treasury. But we know that quite a large number of deals have been struck, including those Country Press association deals. Treasury will hopefully be able to garner information about where that money is going and how much money is going, and that will be able to inform its review. We agree that things are not transparent at the moment, and hopefully the Treasury will throw a degree of transparency over what's happened over the last 12 months, since the legislation kicked off.
4.65
In the Committee’s online survey—which sought views on how Australians living in regional, rural or remote areas accessed news—the majority of respondents (82.55 per cent) to the Committee’s survey said they were not aware of the Code. Of those who were aware of the Code, the majority of respondents (48.5 per cent) said the code had not impacted regional news, while some respondents said it was too early to tell.
4.66
The role of digital platforms and news media has also been considered internationally as well. The European Council announced amendments to copyright laws within the European Union in June 2019 that required services like Google and Facebook to negotiate licences with news outlets in order to put snippets and links in published articles.
4.67
As a consequence of this change, France negotiated a five year deal with Google to secure payment for its Agence France-Presse to produce and distribute multimedia content in six languages around the world. Additionally, Facebook announced in October 2021 that it had made an agreement with French news media to use their content.
4.68
At the time of the Committee’s inquiry, legislation comparable to Australia’s News Media Bargaining Code had not been introduced. However, several countries were considering how comparable models could be implemented.
4.69
In January 2020, the Broadcasting and Telecommunications Legislative Review Panel in Canada released a report that considered the role of digital platforms and the ongoing viability of news media services. The report recommended that the ‘relationship between social media platforms that share news content and news content creators be regulated to endure that news producers are treated fairly when there is an imbalance in negotiating power.’
4.70
Similarly, a review by the United Kingdom in 2019 considered that the relationship between online platforms and news publishers was unbalanced and recommended that new codes of conduct be developed to ‘rebalance the relationship between online platforms and publishers.’
Committee comment
4.71
The Committee notes that the digital environment has evolved significantly over the past decade, and that the way in which Australians access the internet to undertake a range of activities, including accessing news, continues to change and shift.
4.72
The introduction of the Code has been welcomed by many as an effective means to ensure that digital platforms engage in good faith bargaining, particularly with smaller publishers that do not have the resources to continue to provide news services to their local community and compete for visibility online.
4.73
The Committee notes that at the time of its inquiry, no digital platform had been designated under the Code. The Committee was therefore confined to reviewing anecdotal evidence provided by academia and the limited evidence that could be provided by those who had reached confidential commercial agreements with Google and Meta.
4.74
The Committee welcomes the statutory review into the provisions of the Code and acknowledges the evidence provided by the Australian Consumer and Competition Commission – and the terms of reference for the review – that details of those confidential commercial agreements will be sought as part of the review.
4.75
However, the Committee is concerned that a statutory review is the only impetus for the sharing of this information, noting that the confidential nature of the agreements does not allow ongoing assessment of whether the provisions are appropriately addressing the power imbalance between digital platforms and news providers. Therefore, the Committee recommends that the Department of Infrastructure, Transport, Regional Development, and Communications and the ACMA work with Meta, Google and news providers to encourage more transparency in commercial deals.
4.76
The Committee recommends that the Department of Infrastructure, Transport, Regional Development, and Communications and the Australian Communications and Media Authority work with relevant digital platforms and news providers to ensure appropriate transparency in voluntary commercial deals.
4.77
The Committee notes that news providers continue to register with ACMA to participate in the Code in the event it is necessary to designate digital platforms in the future. The Committee was concerned that smaller news publishers have met the criteria to be considered news media, however digital platforms have refused to negotiate.
4.78
The Committee expects this issue will receive appropriate attention during the Department of the Treasury’s statutory review of the Code.
4.79
In addition, the Committee was concerned by evidence received from smaller publishers that the revenue threshold was the only factor preventing them from registering under the Code. While the Committee notes that lowering the threshold would create a higher burden for digital platforms to be required to negotiate in the event of designation, the Committee considers that the value provided by small regional newspapers, and the impact that digital platforms have on their ongoing viability warrants the review of the revenue threshold to ensure news providers are not being unnecessarily precluded. This is especially true when the impact of COVID-19 and the subsequent loss in advertising revenue is considered, as discussed earlier in this report.
4.80
The Committee was persuaded by evidence received from submitters that lowering the threshold would encourage a higher degree of participation by news media in the Code. As such, the Committee recommends that the revenue threshold in section 52M of the Consumer and Competition Act 2010 (Cth) be lowered to $75,000 per annum to encourage news media participation.
4.81
The Committee recommends that the Consumer and Competition Act 2010 be amended to require that news media organisations must have revenue of $75,000 for the most recent year and for at least 3 of the 5 most recent years to register for the News Media and Digital Platforms Bargaining Code.
4.82
The Committee acknowledges the ongoing work being undertaken by Australia and other countries to address the growth of digital platforms and to ensure that organisations can adapt to new technology and continue to provide services to their communities. The Committee recognises the anticipated positive outcomes of the Code in establishing a more balanced negotiation platform and will study the outcomes of the statutory review with interest.