This inquiry was established in the wake of more than half a million Australians signing a petition started by former Prime Minister Kevin Rudd calling for the establishment of a royal commission into Australian media.
This was the biggest electronic petition ever presented to an Australian parliament, and a clear indication that many Australians believe the system of media regulation in this country is not fit-for-purpose.
It is the Parliament’s responsibility to ensure that the nation’s news media are sufficiently diverse, in ownership and in opinion, to maintain a vigorous democracy.
As many submitters and witnesses to this committee noted, ours is not the first inquiry into the concentration of media ownership and the convergence of media platforms in Australia and their consequences for democracy.
The circumstances in which the committee’s investigations have been undertaken, however, distinguish its work and recommendations from those of its predecessors.
Such a high level of discontent from the Australian public cannot be ignored, and it is what prompted the Senate to refer an inquiry into media diversity in Australia to this committee in November 2020.
Through the evidence presented to the inquiry, the committee found that the current regulatory environment for news media is weak, fragmented, and inconsistent. As a result, large media organisations have become so powerful and unchecked that they have developed corporate cultures that consider themselves beyond the existing accountability framework.
The case for a judicial inquiry
The committee recommends the establishment of a judicial inquiry, with the powers of the royal commission called for by Mr Rudd’s petition, into media diversity, ownership and regulation. It is clear that the current regulatory framework is not fit‑for-purpose and significant changes are required.
A judicial inquiry would have the capacity for a more comprehensive investigation, including compelling witnesses to give evidence, than can be undertaken by a parliamentary committee. Such an inquiry would also be conducted at arm’s length of all politicians to allow an independent investigation into media regulation and ownership.
The regulatory framework is not fit-for-purpose
The committee heard significant evidence that Australia’s system of media regulation is not effective, citing the weakness of its mechanisms, its inconsistent governance arrangements and standards across platforms, and the lack of oversight for digital media.
Evidence to the committee testified to the inability of existing regulators to ensure that standards of fairness and accuracy are maintained, and to prevent the spread of misinformation.
This report notes several times that more than a decade ago the Finkelstein Inquiry and Convergence Review found that there was a clear need for a new approach. In the decade since the Finkelstein Inquiry, no progress has been made on updating Australia’s out of date media regulation system. The imperative for change is now even greater given the technological changes that have occurred and the impact this has had on the media landscape.
The committee undertook close consideration and analysis of the suspension, in August 2021, of the broadcaster Sky News from the Google-owned platform YouTube. The incident exposes the pitfalls in self-regulation, and illustrates well the chasm between digital platforms that are not accountable to any external standards or regulatory frameworks, and traditional media businesses that are increasingly converged across platforms while remaining subject to a confusing patchwork of regulatory oversight.
It became apparent during the course of this inquiry that even large media proprietors concede that some degree of regulatory reform is required—though usually with the proviso that their own activities should not be held more accountable than they are at present.
This attitude was best summed up by the Global Head of News Corp, Mr Robert Thomson. On the fundamental point of whether a commission of inquiry, as called for in the Rudd petition, is necessary, Mr Thomson did not reject the idea outright: ‘It depends what the remit of any commission would be. What I’m looking at more is how to regulate for the future, not, frankly, focusing on the past’.
When asked, however, whether anti-siphoning laws should be extended to cover internet platforms such as Google and Facebook to forestall them charging users for viewing sporting events, Mr Thomson replied ‘honestly, I have conflicting views on this. I would like it to be relaxed for us and intensified for them’.
Even the present Australian Government, although reluctant to confront the power of large media proprietors in this country, accepts that the global internet platforms must be brought within an effective regulatory framework.
The government has taken the first steps towards regulating Google and Facebook. It has legislated to establish the Media Bargaining Code, under which the internet companies negotiate with producers of news content to compensate them for lost revenue. The Communications Minister, the Hon Paul Fletcher MP, has also foreshadowed legislation to protect children and teenagers from harmful content on the internet platforms.
These developments happened during the committee’s investigations and are acknowledged in our report. As the report was in preparation, the government announced further legislation to rein in internet companies. Under the proposed changes, the companies would be obliged to provide the contact details of people who anonymously post abusive or defamatory material online. If the companies are unable or are unwilling to do so, they will become liable for the defamatory content of the posts.
The announcement of 28 November 2021, made in the context of an approaching federal election, indicated the government’s awareness of growing popular anger at the ability of internet companies to evade responsibility for what is published on their sites. Two days later, on 30 November 2021 News Corp’s flagship masthead, The Australian, gleefully hailed the proposed legislation in an editorial that looked forward to breaking “open the cowards’ castle of anonymity that has allowed bullies to flourish unchecked”.
The editorial acknowledged that the move had been prompted by the High Court’s ruling in the Voller case, which found that media companies are liable for defamatory comments published on their Facebook pages. The Australian also noted that ‘global social media platforms will be required to establish a quick, simple and standardised complaints system’. So far, however, neither traditional media companies like News Corp nor the government have shown any enthusiasm for broader regulatory reform of the media sector. It is the committee’s strong view, reflected in our recommendations, that focusing on the internet platforms alone will not resolve the grave problems in Australia’s media sector.
The committee heard extensive evidence that the complaints processes for traditional media are insufficient and slow. There was clear evidence that the self‑regulation model for print media through the Australian Press Council is woefully inadequate. Equally, the Australian Communication and Media Authority’s (ACMA) oversight of broadcast media is slow, complex, onerous for complainants and often inconclusive.
The committee believes that with the convergence of media platforms brought about by the internet, there is merit in the creation of a single regulator with powers across all platforms. The efficacy of such a measure is a matter for the judicial inquiry, but the centrality of the delivery system (i.e. through digital platforms) means that it is firmly a Commonwealth responsibility and cannot have an ad hoc or piecemeal approach. The committee recommends that the terms of reference for a judicial inquiry include consideration of mechanisms for regulatory oversight, including the establishment of a platform-neutral single news regulator.
Issues with media ownership concentration
It is widely recognised that Australia has one of the most concentrated media markets in the world. While it was hoped that the rise of the internet would democratise access to information, the business model that underpins public interest journalism is coming under great stress in the internet age.
The problem of concentration has been exacerbated by the rise of global internet platforms, which aggregate information from many sources, including the mainstream news media, but which at present are not subject to effective and independent regulation.
The whistleblower and former senior Facebook employee Frances Haugen testified to a United States Congressional committee that the algorithms of Facebook and Instagram had been used to manipulate users of the platforms, to ‘harm children, stoke division and weaken our democracy’.
She said the company’s leadership know ‘how to make Facebook and Instagram safer but won’t make the necessary changes because they have put their astronomical profits before people’.
Ms Haugen’s testimony is a challenge to legislators in all democracies to devise a system for media regulation that can combat abuses, foster diversity and support the practice of public interest journalism.
Public interest journalism is essential to a democracy. Active citizenship requires access to reliable information, and democracy cannot flourish without a diversity of media sources and a regulatory regime that protects consumers against the spread of misinformation.
The concentration of media ownership is inherently corrosive of democratic practice because it places control over the sources of information and opinion in far too few hands.
Since the 2017 changes to the Broadcasting Services Act that removed the ‘2 out of 3’ cross-media control rule and the 75 per cent audience reach rule, the concentration of media ownership in Australia has increased. The passing of the legislation allowed the $4 billion merger between Fairfax and Nine in 2018 and has allowed News Corp to increase its dominance, owning radio, newspapers in each capital city, regional newspapers and a majority share of the Foxtel news network.
A comprehensive reform of media regulation is required, both to foster increased diversity in the sources of public interest journalism and to ensure that ethical standards are upheld.
News Corp, the media empire controlled by Rupert Murdoch is the clearest example of a troubling media monopoly in Australia. Mr Murdoch has been a US citizen since 1985, and since 2004 the US-based holding company News Corporation has been registered in Wilmington, Delaware. Its wholly-owned Australian subsidiary, News Corp controls nearly two-thirds of metropolitan print mastheads and the most frequently accessed online news sites in Australia.
Most recently, the power wielded by media proprietors has been glaringly obvious in the about-face on climate change in News Corp’s Australian tabloid newspapers. After nearly a decade of campaigning against the science of climate change and against policies aimed at lowering carbon emissions, editors of all of News Corp’s Australian mastheads suddenly decided, at the same time, to take the opposite line.
They called for the policy that the Morrison Government took to COP26—a pledge of reaching net-zero emissions by 2050. The Coalition had resisted this for more than a decade, but it now has, in effect, a licence to adopt this policy issued by News Corp. There could be no clearer example of the clout wielded by the proprietors that dominate Australia’s commercial media.
The spread of misinformation
One of the major concerns that the committee heard from submitters was the rise of misinformation, both in traditional media and on digital platforms. The YouTube ban on Sky News over the publication of public health misinformation highlighted that there is an issue when a private company is able to act swiftly to protect the public from misinformation but the ACMA, the media regulator is not.
The need to preserve our public broadcasters, the NBN and newswire service
The public broadcasters, as independent sources of news, are notable exceptions to the dominance of the private proprietors. They should be better resourced and calls to privatise them should be rejected.
The committee believes that the media diversity in Australia can be increased by ensuring widespread and faster access to the internet through the National Broadband Network (NBN).
Media diversity can also be supported by devising new forms of finance for independent ventures in public interest journalism. The committee supports increased public funding of start-up media engaged in public interest journalism. This could include both direct grants administered by an authority separate from the government of the day, and assistance through the taxation system. How best to implement these measures should be included in the judicial inquiry’s terms of reference.
In the context of direct funding, it is especially important that Australian Associated Press, Australia’s sole independent newswire, can survive under its new not-for-profit model.
To achieve these aims, it is essential that the NBN remains in public ownership. Ensuring access to the network for new content providers, especially those engaged in public interest journalism, can create opportunities to counter the power now wielded by big media proprietors through ownership of print platforms and associated online sites, and control of broadcast spectrum.
The committee offers this report and its recommendations to all who aspire to build a more vigorous democracy in this country.
Recommendations
Recommendation
The committee recommends that the Commonwealth initiate a judicial inquiry, with the powers of a royal commission, to determine whether the existing system of media regulation is fit-for-purpose and to investigate the concentration of media ownership in Australia. The committee believes that media convergence due to technological change has greatly strengthened the argument in favour a single regulator across all platforms. As a consequence, the committee further recommends that the judicial inquiry’s terms of reference include consideration of a single, independent media regulator to harmonise news media standards and oversee an effective process for remedying complaints.
Recommendation
It is the Parliament’s responsibility to ensure that the nation’s news media are sufficiently diverse, in ownership and in opinion, to maintain a vigorous democracy. In support of this goal, the committee recommends:
That Australia’s two public broadcasters, the ABC and SBS, be sustainably and adequately funded. The ABC’s Enhanced Newsgathering funding should be renewed in its upcoming budget.
That the Government commit to long-term and adequate funding of Australia’s only independent newswire, Australian Associated Press.
That the Government release its final proposals for reform that have been developed through the Media Reform Green Paper consultation process.
That the Government establish an independent and permanent trust to assist emerging news ventures, especially in regional areas. The trust’s responsibilities should include funding journalism traineeships.
That the National Broadband Network remain in public ownership and be upgraded to a fit-for-purpose standard as originally intended, to provide crucial communications infrastructure for as broad a range of new media ventures as possible, especially those engaging in public interest journalism.
That concessional rates of taxation, modelled on the existing Research and Development Tax Incentive, be made available to new ventures investing in public interest journalism. The terms of reference for the judicial inquiry called for in Recommendation 1 should include consideration of how best to implement this tax measure.
That the Government extend Deductible Gift Recipient status for appropriate ventures in public interest journalism.