Australia to rely on Competition law to make Google and Facebook pay for content

May 11, 2020
Justice New Zealand IPO Refuses

By Bijit Das and Meril Mathew Joy

Online and social media platforms help bring an array of content to its consumers, however, such content is mostly third party content provided by other media platforms. In this regard, considering the business model of social media platforms, which rely upon revenue through advertisements, there is a balance that needs to be sought with respect to the content providers’ share in such revenue. On the one hand we note that the content providers stand to profit in terms of online traffic on their websites by providing content on social media / online platforms and on the other hand the same information forms a big chunk of content that the social media / online platforms are used for by its consumers. However, to ascertain the relation and weightage, a thorough investigation has to be done as to which side is more reliant on the other and if sharing profits/ revenue is a need or just a way of enforcing equal distribution / welfare policies over the tech and media giants such as Facebook and Google.

Distortion of local media and advertising markets by tech and media giants

In this regard a Digital Platform Inquiry conducted by Australia in 2018-19 concluded that Google and Facebook have distorted local media and advertising markets in ways that make it hard for publishers to monetise their content.[1] This is not a first of its kind inquiry, countries such as Spain and France have already conducted talks with Google on the subject of sharing credit and compensate media / content providers. The European Union has too been on the forefront of bringing the tech and media giants under the purview of copyright laws.

The current Inquiry recommended that a code can be drafted wherein some consideration flow can be allowed from social media giants like Google, Facebook etc. to the publishers of the content. The consultation process in this respect did not have a meaningful progress and the social media platform raised concerns over such mandate. With the inquiry and its conclusion in place, the Australian government was ready to proceed with developing mandatory code of conduct to address bargaining power imbalances between media companies and digital platforms such as Facebook and Google – and the question of payment for content.[2]

ACCC may release draft rules mandating online platforms to pay fair compensation for journalistic content taken from news media

In a recent event, Joshua Anthony Frydenberg (the Treasurer of Australia and Deputy Leader of the Liberal Party) has said that the Australian Competition and Consumer Commission (ACCC) would be releasing proposed draft rules in or around July this year, mandates for the platforms to pay fair compensation for the journalistic content siphoned from news media.[3] While justifying the intention of this effort Treasurer Josh Frydenberg said that “It is only fair that the search engines and social media giants pay for the original news content that they use to drive traffic to their sites.”[4] The ACCC is now entrusted with the responsibility to prepare the draft code rules including the possible provisions for value exchange, transparency, revenue sharing, access to user data, presentation of news content, penalties and sanction for non-compliance etc.[5] The media giants have not appreciated this surprise announcement trying to expedite the process of preparing the code, as against the initial deadline to negotiate the voluntary code by November 2020. Managing Director for Australia and New Zealand Will Easton said in a statement that “We’re disappointed by the government’s announcement, especially as we’ve worked hard to meet their agreed deadline.”[6] Further he also mentioned that “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.”[7]

The process of creating a mandatory code has now become a major news since the Australian Treasurer is keen on addressing this issue on urgent basis. The process was initiated in 2019 however, seeing the slow progress and present coronavirus impact slowing the process further, raised concerned over the actual position of the Government to address the concern of media industry. With the present Covid-19 situation and the continuous regular content being published by the media industry, it became more important for the Australian government to take a stand assisting the original publishers to obtain the due compensation for use of their original content by the social media giants like Google and Facebook. The intention of the mandated code is only to direct the social media platforms to share revenue generated by use of content by the original publisher.

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