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Australia releases News Media Bargaining Code for Stakeholders’ comments

August 18, 2020

By Bijit Das and Meril Mathew Joy

Digital Platform Inquiry conducted by Australia in 2018-19 concluded that Google and Facebook have distorted local media and advertising markets in ways that makes it hard for publishers to monetise their content and therefore it was recommended that a code can be drafted wherein some consideration flow can be allowed from social media giants like Google, Facebook etc. to publishers of the content.[1] Thereafter the Australian Competition and Consumer Commission (ACCC) issued a statement through its Treasurer, Joshua Anthony Frydenberg, that the ACCC would be releasing draft rules around July 2020. A detailed post on Australia relying on Competition law to make tech giants like Google and Facebook to pay for content can be found here.

Now the Australian Competition and Consumer Commission has released the News Media Bargaining Code on July 31, 2020 and have asked the interested parties to provide their written submissions on the draft code due on August 28, 2020 by 5pm to the email id bargainingcode@accc.gov.au.

Draft Bill News Media Bargaining Code can be found here.

Explanatory Material on the Draft News Media Bargaining Code can be found here.

A detailed note can also be found on the official website of ACCC at https://www.accc.gov.au/focus-areas/digital-platforms/news-media-bargaining-code/draft-legislation.

A brief on the intention and approach of ACCC  on the News Media Bargaining Code can be understood under the below headings:

How will the Code help in facilitating the Negotiation and Payment related issues?[2]

The Code aims to facilitate the negotiation between the Australian news businesses and the digital platforms (initially focusing on Google and Facebook) for a fair payment scheme for the content of the media. Some key focus of the Code are as under:

  1. The Code will help the Australian media to bargain with tech giants like Google and Facebook to secure fair payment for news content. The Code allows media business like regional and community master-heads to collectively negotiate with the digital platforms.
  2. The Code addresses acute bargaining power imbalances between the digital platforms and the Australian news business.
  3. The Code provides if Australian news businesses and digital platforms does not settle a deal within 3 months of negotiation, then an arbitrator will choose the offer which is most reasonable within 45 days of its appointment. This selection of offer by the Arbitrator is “Final Offer” arbitration process.
  4. Final offer arbitration process in incorporated as a procedure to ensure settlement of any conflict or disagreement between the parties.
  5. The Code will initially be applicable on Google and Facebook, but the Code is drafted in a manner to include other digital platforms as well eventually.

The Australian Communications and Media Authority (ACMA) is required to use set criteria to determine which Australian news media business are eligible to be governed and benefited under the draft code. The notification issued by the ACCC provides:

Media businesses would be eligible if the online news content they produce investigates and explains issues of public significance for Australians; issues that engage Australians in public debate and inform democratic decision-making; or issues relating to community and local events. In addition, they must adhere to minimum levels of professional editorial standards, and maintain a suitable degree of editorial independence; operate in Australia for the main purpose of serving Australian audiences; and generate revenue of more than $150,000 per year.[3]

Some important provisions of the code can be briefed as under:

  • The Treasurer upon considering the significant bargaining imbalances between the Australian News provider and the digital platform can determine designated digital platform corporation.
  • Under the Code the news media businesses are required to notify Google or Facebook their wish to bargain and thereafter 3 months are provided to negotiate the terms including payment. However, if no negotiation is reached within the 3 months period then provision of compulsory arbitration is also provided, i.e. Final Offer Arbitration. Once the arbitration is initiated, it is compulsory for the digital platform to participate in the arbitration and the outcome of the arbitration will be considered binding on both the parties.
  • The Code requires the news media organisations to prepare an arrangement over the payment of content and/or other terms, and then notify the same to Google or Facebook. As the code allows formation of collective groups therefore the media organisations can come together and negotiate with the digital platforms.
  • The Code also encompasses the provisions of minimum standards to govern non-payment related issues which cannot be negotiated away by the digital platforms. The Code under these standards requires the digital platforms to provide a notice of 28 days to the Australian media businesses, of any algorithm changes which is likely to material affect the traffic to news, ranking of news behind paywall and substantially affects or modifies the presentation, display and/ or advertising with respect to the news.
  • The Code also required the digital platforms to maintain transparency in terms of information which is derived out of the user engagement with the digital platforms. Further, digital platforms are also required to share the proposal on recognizing the original news content on their platform, provide flexible user comment moderation tools for news media businesses and the media businesses are empowered to prevent the sharing of their content on any digital platform.
  • Enforcement action may be taken by ACCC against non-compliance with the Code including not bargaining in good faith during negotiations, including aspects like refusing to participate in negotiation, mediation or arbitration; breach of non-discrimination provisions and minimum standard commitments.
  • The Code provides that where ACCC has reasonable grounds to believe that any party has contravened the provisions of the code , in such case the ACCC can issue notices of 600 penalty units ($133200). If the ACCC considers initiating Court proceedings then the maximum penalties would be greater of either:[4]
  1. $10,000,000;
  2. Three times the benefit obtained from the conduct (if calculable); or
  3. 10% of digital platform’s annual turnover in Australia in the last 12 months.

Enforcement action can be taken against either parties, i.e. the Australian News Businesses or the Digital Platforms.

Can such Code be utilized in the Indian System?

The effort of bringing in a Code for regulating the payment of news content used by digital platforms appears to be a proactive and motivating move in favour of journalism. Incentivising of original content, royalty/ payment sharing based on traffic reached on the article and/ or other factors, will motivate and encourage news businesses in India to create original content. If India decides to enact a similar code, then the news media agencies in India will be more motivated for original content rather than borrowing original content under fair dealing for providing information to public.

Even though the Code appears to be a very unique move by the Australian Government however in order to identify the effectiveness of any similar code in India, it is vital to await the final notification of the Code post discussion with stakeholders. With the written submissions pending, it is crucial to await the views of the tech-giants like Google and Facebook and their proposal in implementing such one of its kind Code on bargaining of news content. Once such code is passed by the Australian Government then the possibilities of other countries implementing similar codes also appears as probable and therefore the comments by digital platform is very crucial in determining how such code can prevail in different jurisdiction.

[1] Available at https://www.ssrana.in/articles/australia-competition-law-google-facebook-pay-for-content/

[2] Available at https://www.accc.gov.au/media-release/australian-news-media-to-negotiate-payment-with-major-digital-platforms

[3] Available at https://www.accc.gov.au/media-release/australian-news-media-to-negotiate-payment-with-major-digital-platforms

[4] Available at https://www.accc.gov.au/system/files/Q%26As%20Draft%20news%20media%20and%20digital%20platforms%20mandatory%20bargaining%20code.pdf

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