The federal government has asked the Australian Consumer & Competition Commission (ACCC) to create a mandatory code of conduct for commercial dealings between digital platforms and media companies. This will include the sharing of advertising revenue as well as transparency around data and algorithm changes.
While a similar voluntary code was already in the works, negotiations thus far and the impact of coronavirus on Australian media has forced the government to take a harder and faster stance.
The voluntary code in development was a response to the ACCC’s Digital Platforms Inquiry report, which was released in December 2019. Its purpose was decrease the power and advertising revenue imbalance between digital platforms, such as Google and Facebook, and traditional media outlets.
The code required large digital platforms to negotiate payment to publications for their content and preemptively inform organisations of algorithm changes that may impact their rankings.
The ACCC has since said that coming to a voluntary agreement around paying media for its content would be unlikely. Now these platforms apparently won’t have a choice.
“In response to a request from the Government, the ACCC recently provided an early status report on negotiations. The ACCC informed the Government that while the parties were engaging well on a number of issues, it appeared unlikely that they would reach agreement before November 2020 on complex and critical issues including value exchange and payment for the use of news content on Google and Facebook services,” said ACCC chair Rod Simms in an email to Gizmodo Australia.
“The negotiations on developing voluntary bargaining codes will now cease. The ACCC recognises that there had been worthwhile engagement on both sides of these negotiations, and will take all parties’ representations into account in developing a draft mandatory bargaining code. The ACCC recognises that there is now considerable vital and urgent work to be done.”
The new mandatory code of conduct remains largely the same but will be enforceable through penalties and dispute resolution sanctions. Implementation of the code has also been brought forward. While negotiations were initially set to run until November 2020, a draft of the mandatory code is now expected by the end of July, according to The Guardian.
This news comes at a time where the COVID-19 pandemic has resulted in some Australian media companies implementing redundancies, pay cuts, short work weeks and leave. Communications minister Paul Fletcher has said the COVID-10 has resulted in significant financial pressure on media companies, and that advertising revenue has been hit hard.
“Digital platforms need to do more to improve the transparency of their operations for news media providers as they have a significant impact on the capacity of news media organisations to build and maintain an audience and derive resources from the media content they produce,” said communications minister Paul Fletcher in a statement,” said Fletcher in a statement.
Treasurer Josh Frydenberg has said a mandatory code of conduct will “will help to create a level playing field.”
It is understood that Facebook has met with some publishers in recent weeks to get feedback on the draft for the original code, which was set to be due in May. Some companies are said to have raised concerns around the public nature of some of commercial deals included in the draft.
“We’re disappointed by the Government’s announcement, especially as we’ve worked hard to meet their agreed deadline. COVID-19 has impacted every business and industry across the country, including publishers, which is why we announced a new, global investment to support news organisations at a time when advertising revenue is declining,” said Will Easton, managing director of Facebook Australia and New Zealand in an email to Gizmodo Australia.
Facebook also highlighted its investment into Australian media to date.
“We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem. We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry and hope the code will protect the interests of millions of Australians and small businesses that use our services every day.”
It is currently unclear exactly what bargaining power media outlets will have or what a revenue split might look like in terms of percentages or how it will work.
This post has been updated to include comment from the ACCC and Facebook.