Labor Senators recommend the bill be passed, subject to the government addressing key concerns as the government has ‘signalled’ it will.
Labor Senators are of the view that the government should ensure that a bill of such consequence, in a negotiation context, be readied for debate in Parliament. We urge the government to answer outstanding Senate questions and circulate any proposed amendments as a matter of urgency.
Labor Senators also recommend that the government use precise language in public statements regarding what designations it intends to make under the code. This is in order to save any misunderstanding or unnecessary uncertainty for the media, digital platforms, small businesses and citizens and consumers who may be impacted.
Labor Senators affirm the need to address the bargaining power imbalance between news media businesses and digital platforms. We affirm that Labor has offered constructive, in-principle support for a workable code since the government announced a mandatory code in April 2020.
Labor Senators note that many of the concerns, now before the committee, were raised by stakeholders during public consultation on the draft code over six months ago, but not resolved at the time. We note the government indicated it would have the code in place in 2020 yet the bill was not introduced until the final sitting week of Parliament last year and remains subject to government amendment in 2021.
Labor Senators note that following the conclusion of public hearings before the inquiry, there were further developments and negotiations between the government and Google.
On 4 February 2021, it was reported that:
Google has not backed down on its threat to withdraw from Australia in a call between Scott Morrison and the tech giant’s parent company chief Sundar Pichai on Thursday, but tensions appear to be easing” and that the Prime Minister said “I have been able to send them the best possible signals that should give them great encouragement to engage with the process and conclude the arrangements we’d like to see with the news media organisations.
On 5 February 2021, it was reported of Google News Showcase that:
…the Treasurer urged the search giant to launch the product and get deals with publishers done” and that “there was an understanding the government may then consider amendments to the proposed mandatory bargaining code which the Silicon Valley-based company has requested”, industry sources said.
Labor Senators further note that there were also developments and negotiations between Google and the news media which are ongoing. On 4 February 2021, Google announced that Google News Showcase had launched in Australia which, as at 11 February 2021, seven Australian publishers, representing more than 25 titles, had signed on to.
Labor Senators note that during the course of the inquiry, there were developments and negotiations between the government and Facebook and we are cognisant that there may have been other developments and negotiations variously between the government, digital platforms and the media which have not been reported on or brought to the committee’s attention.
Labor Senators are concerned that, at time of writing, a number of questions about designation under the code asked by the Senate Scrutiny of Bills committee have not been answered by the Treasurer and remain outstanding. We are also concerned that Treasury and Department officials were unable to provide satisfactory answers to questions on impact and risk assessment and cost/benefit analysis on the bill at the public hearing. For this reason, Labor submitted further questions on notice in writing and we remain concerned that no further analysis or information was forthcoming in the response.
Labor Senators support the intention of the bill which is to address the dominance of digital platforms Google and Facebook for the benefit of the Australian news media. Labor Senators note, however, that the corollary of addressing the dominance of digital platforms may involve potential impacts beyond the news media, the outcomes of which are unknown.
Labor Senators note that the government’s indication by media release on 8 December 2020 that the code will initially apply to Google Search combined with the Minister’s subsequent enthusiastic promotion of alternative search engines, Microsoft’s Bing and Duck Duck Go, has caused many Australians and small businesses to experience uncertainty and worry as well as express concerns about the impact of the potential withdrawal of Google’s search engine from Australia. In addition to submissions to the inquiry, this has been brought to the attention of Labor MPs and Senators by individual constituents and small businesses directly.
Labor Senators note that a broad range of stakeholders, including peak business groups, acknowledge the potential disruption millions of consumers and small businesses during the economic recovery, in the event Google withdraws Search and Facebook withdraws News from Australia in response to the passage of the bill, despite the availability of alternative search engines and social media platforms. Recent reporting referred to the impact as a ‘death sentence’ for SMEs.
Evidence to the inquiry indicates that, in the event that Google and Facebook withdraw services from Australia, revenue will not flow from these digital platforms to the news media but some mainstream media businesses may benefit from increased direct traffic to and/or advertising on their own news products and services, while small and independent media businesses will lose search/social traffic referrals and media diversity will be undermined.
Labor Senators note there is broad in-principle support for a code and regulation of digital platforms however many stakeholders have serious and specific concerns with the bill as drafted. There is a divergence of views including as between established mainstream media and new and emerging media in accordance with their reliance on search and social media for audiences and revenue.
A range of stakeholders seek amendments to the bill, including peak media industry bodies. We note concerns around unintended consequences, such as relating to the professional standards test as well as the potential to incentivise click bait, and regard these as matters for close consideration up to, including and after the 12-month review of the code.
Labor Senators are pleased at evidence that work on the code to date has improved the responsiveness of digital platforms to the news media. However, we are mindful of evidence that the code does not guarantee any particular outcomes for the media, journalists, citizens or consumers. Media stakeholders are not yet clear on how much, if any, additional revenue may be derived as a result of an improved bargaining position under the code or how much revenue, if any, will be invested in additional journalists or journalism. This underscores the fact that the code is not a ‘silver bullet’ and that the government must to do more to support public interest journalism in Australia.
Data collected by the Australian Competition and Consumer Commission (ACCC) show that between 2008 and 2018, 106 local and regional newspaper titles closed across Australia, representing a net 15 per cent decrease in the number of these publications. These closures have left 21 local government areas previously covered by these titles without coverage from a single local newspaper (in either print or online formats), including 16 local government areas in regional Australia. Since January 2019, the number of contractions in Australia's public interest news landscape has grown to over 200, according to data from the Public Interest Journalism Initiative's Australian Newsroom Mapping Project.
The Australian Communications and Media Authority has confirmed on record that media diversity in regional and remote areas is already at or below the minimum number of voices in 68 per cent of licence areas. The government recently admitted to early warning signs of market failure in regional commercial television broadcasting in the Explanatory Memorandum to the Broadcasting Services Amendment (Regional Commercial Radio and Other Measures) Bill 2020.
Next month marks once year since COVID-19 related closures and suspensions of news titles began to be announced, compounding the closures that had already occurred over the decade prior as a result of digital disruption.
Labor Senators note that the code is only one of a suite of measures recommended by the ACCC to support public interest journalism. In the time since the ACCC released the Final Report of the Digital Platforms Inquiry, in July 2019, the government has failed to address a number of these recommendations, including genuine media reform, stable and adequate funding for the public broadcasters, adequate direct funding, tax incentives and philanthropy measures.
Labor Senators note the overwhelming evidence before the committee that the government has a lot more to do to support public interest journalism in Australia. This includes support to ensure the ongoing viability of the Australian Associated Press (AAP) as the key wholesale provider of news in Australia and a critical pillar of media diversity. We emphasise evidence that the code does nothing to help AAP newswire and that any notion of ‘trickle down’ economics under the code is naïve.
Labor drew the plight of AAP to the government’s attention in March 2020, including through Senate Estimates, and called on the government to provide COVID-19 relief funding to the media in April 2020. The government’s September 2020 announcement of $5 million for AAP was late and inadequate. The benefits to democracy of an independent wholesale newswire business are many and we urge the government to make appropriate provision for AAP as a matter of priority.
Labor Senators are of the view that a strong, high quality and diverse news media sector is essential to a healthy democracy. Equally, we are of the view that a strong, high quality and diverse tech sector is necessary for a healthy networked society and digital economy.
We are cognisant of the fact that Australia has one of the most concentrated media markets in the world, and that search engines and social media are instrumental in facilitating access for many Australians to a more diverse range of news media, both domestic and international. Australians deserve the best in terms of choice and quality, and we are concerned that any reduction in choice or quality would be to the detriment of Australian citizens and consumers.
Labor Senators acknowledge the work of the ACCC over the course of the 18 month long Digital Platforms Inquiry and the year-long code oversight and development process, as well as the input of the ACCC’s global counterparts, in crafting and informing the bill before the committee.
Labor Senators affirm that Australian sovereignty should be respected and that Australian law should be well-crafted, proportionate and fair.
Senator Alex Gallacher
Deputy Chair
Labor Senator for South Australia
Senator Jenny McAllister
Member
Labor Senator for New South Wales