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News Media Bargaining Code

I believe you have the right to be heard by your politicians. That's why I want your advice on this issue.

The Government’s announced a media bargaining code it wants to push through.

It makes Facebook and Google pay news companies for featuring links, headlines and brief descriptions of the content on the other side of the click.

News companies believe the tech companies are financially benefiting from having news content on their websites, but are not contributing to the cost of producing that content, and argue that none of them individually have the bargaining power to demand a better deal.

Google and Facebook are opposed to it, arguing it isn’t workable. They argue they’re prepared to support journalism in Australia but can’t do that if laws are passed that make it impossible for them to operate in Australia.

The major publishers of news in Australia are supportive of it, including News Corp, Nine Entertainment and The Guardian, arguing that big tech companies are gobbling up advertising dollars and undermining their ability to fund journalism.

Facebook and Google have both said that, if the code passes, they will not be able to continue to operate the way they’re currently operating, which means crippling functionality or shutting down services in Australia altogether.

PROS

    Australian journalism is shrinking, and the code could help stop the decline
    If Google and Facebook are profiting from journalism, they should support journalism, or at least pay for what they’re taking for free.
    Google and Facebook can afford to pay more: these companies make more than $4 billion a year in revenue in Australia. They’re enormous, and they pay little tax.
    Google and Facebook have huge market dominance, and this could code even the playing field: if you’ve got too much power in your market, you’re able to boss around smaller players, which hurts competition, puts up prices and reduces innovation.

CONS

    Making companies pay for linking online to other content would be the end of the internet as we know it, according to the guy who invented it.1 (Let alone if Facebook and Google stop working in Australia!)
    The code could actually reduce competition and harm smaller news publishers: smaller news companies that aren’t included in the code would be left to compete with larger companies that are, which is like fighting with one arm behind your back
    This could put up the price of digital advertising for small businesses who can’t afford to advertise in traditional media like newspapers or TV: Google’s average small business customer spends about $30 a day on advertising. Compare that with a day’s worth of advertising in the newspaper (around $5,000) or on television (with one ad costing around $10,000). If Google’s required to hand advertiser money to publishers, that’s a cost. If it’s able to pass that cost back on to advertisers, then small businesses end up subsidising large multinational media companies like The Guardian or News Corp.
    The money this could collect doesn’t actually need to be spent on journalism at all: the money can be spent by publishers on whatever they want, like executive bonuses, share buybacks or office refurbs.

What do you think?

Should we go ahead with the code, despite the risks it poses? Or should we hold off with the code, even if it means the media companies don’t get more money to pay for things like journalism?



Advise me

Jacqui's team is reviewing the responses.


    1 “Web inventor concerned new Australian code breaches internet's fundamental principle”, ZDNet. January 20 2021.