The Times of India
on how the Australian government evolved a legislation on technology platforms and news publishers that not only prevented the erosion of journalism, but also gave news media businesses in Australia an opportunity to expand at a time they are facing redundancy in other parts of the World.
Q. What is the Australian law on technology platforms and news publishers and how did it come about?
A. It was evident to the Australian government that our media businesses were facing significant competitive effects from the global digital platforms, particularly Google and Facebook. Competition is a good thing and we do not say that Google and Facebook should not be in a market and competing. But the competition policy issue was that when Google and Facebook competed with news media businesses, they were also using content generated and paid for by those businesses to attract eyeballs.
So, we asked our competition regulator, the Australian Competition and Consumer Commission (ACCC), to investigate this and to conduct the Digital Platforms Review. In 2019, the ACCC turned in a report containing 23 recommendations. One of them was that there ought to be a bargaining code governing the commercial negotiations between Facebook, Google and news media businesses over the terms on which the Big Tech companies would use content generated and paid for by the news media businesses. We accepted all 23 recommendations and in the first half of 2020, negotiations got underway on the bargaining code. At that point, these were to be voluntary codes. When the negotiations went very slowly, we decided to made the codes mandatory because we were very concerned about the impact on our news media businesses.
From July 2020, when a draft of the code was released to January next year, Google, Facebook and all other stakeholders were given several opportunities to make comments and provide feedback and the legislation finally passed parliament in February 2021.
Q. Was it pressure from news publishers that led the Australian government to evolve this legislation?
Certainly there was advocacy from news publishers. But as is often the case, when it comes to public policy, what you do when people come and say there is an issue is to investigate and see if it is something that requires government action. When we had our competition regulator do this and when we announced that we will accept all their recommendations, the key point was that the evidence they had was very persuasive. They made the point that for news media businesses, Google and FB are compulsory media partners. Yet, it was almost impossible for the Australian news media businesses to find a human being at Google and Facebook to sit down with and have negotiations. I know similar complaints are made in many markets around the world. All of this persuaded us to evolve a competition policy response following by the bargaining code, which took some time. We drew on competition codes in other businesses in Australia because ultimately, we were persuaded that it was a media and economic policy issue and a matter of importance for our liberal democracy.
Q. Was there concern in the government that Australia would lose business from Big Tech?
A. That is a good question because this is something that the Big Tech companies say. In my career, I have been involved in issues pertaining to Big Tech for many years. I came into Parliament in 2009. For two years from 2013, I was parliamentary secretary to the previous minister of communications. One of my responsibilities was to deal with online safety for which we evolved a legislation. Facebook and Twitter did not like this. Big Tech said that if we push ahead with this law, Australia will become a technological backwater. What I noticed is that 10 years ago, those arguments were given credence. But I think we have become more sophisticated, and it is now understood that Big Tech will make these arguments in their own interests. We don’t fault them for it, and we are clear that our government welcomes the activities of Google, FB and other big tech companies. However, these are policy issues where decisions need to be made by sovereign governments, not by tech companies.
Ultimately, governments around the world want to see the tech sector grow, drive economic growth and deliver services to citizens, like India has done with bank accounts and mobile phones. It is important to welcome and encourage tech businesses, but equally to understand that there are decisions that must be made by governments in the interest of citizens and not, by default, by tech companies who argue that it is their global policy.
Q. How did the Big Tech react?
The Australian legislation came into existence, but not without some turbulence along the way. Google said that they might have to withdraw search services from Australia. It wasn’t clear how this was going to work because Australian consumers would presumably have gone to Google’s global site or used a VPN to get around any geo-blocking. Facebook turned off the FB pages of Australian news media businesses. It was done in a clumsy way and they also turned off FB pages of several other businesses and services like police and ambulance. There was a crisis when this happened and in PR terms, this did not go well for them.
There was a lot of resistance, but we believed that this was right thing to do and relied heavily on the advice of our competition regulator. Due to our action, Google has now entered into 19 deals with media businesses and Meta has done so with 13.
Q. What is the Bargaining Code and how does it work?
The way the code is set up is that it is designed to encourage commercial deals. It effectively says that an Australian news media business has the right to go to a Google or FB and negotiate. If after 3 months, there is no satisfactory outcome, there can be mediation. If this also fails, an arbitrator can be appointed and the price set by the arbitrator will be binding. This is something businesses don’t like – that an arbitrator decides the price that a Google or FB should have to pay. This created a strong incentive for Google and Facebook to do commercial deals. In fact, all commercial deals Google and Facebook have signed since have never once had to go through an arbitrator. So this has been a very practical way of dealing with this problem.
Q. Digital news publishers in India have embraced the Australian model and want it replicated in India. What would you suggest the Indian government should do?
A. I want to be clear and careful. I am not here to say to the Indian government what it should do. That is the matter for the Indian government to consider and decide on. What I am here to do is to talk about our experience in Australia. There are big differences between India and Australia. We are 25 million people and India is 1.4 billion. Though we have multi-ethnic publications, our numbers are smaller than India. The economics are also different. As a government, we in Australia were worried about the impact on our news media businesses and the erosion of journalism. We saw it, first and foremost, as a competition policy problem. Then we saw it as a media policy problem. If the diversity of media is reduced, it is a bad thing. We also saw it as a policy issue for any liberal democracy because of the role the media plays in holding governments to account. So, though we treated it at its core as a competition problem, it was also a policy issue in other ways.
Q. What has been the impact of the Australian legislation on news media publications and Big Tech?
A. The Big Tech businesses have not been able to convincingly demonstrate to the government any adverse impact on their work.
One of the things the legislation said was that after 12 months, the treasury will conduct a review. This review was published in October last year and it found that the code has been a success. It cited a report prepared by the former ACCC chair Rod Sims, who estimated that $ 200 million worth of commercial deals were firmed up (between Google, Facebook and news media publications) as a result of this legislation. That, clearly, was value transferred from Google and FB to publishers.
A numbers of news media businesses have spoken publicly about the number of additional journalists they have been able to employ. The Australian Broadcasting Corporation, our government-owned broadcaster, did separate deals with Google and FB. It got extra revenue as a result, on top of the public funding it received, and has committed to use all of this to employ 50 journalists outside of our capital cities, in regional and remote areas. News Corporation said it has, jointly with Google, established a facility for journalists to get more training on how to operate in a digital world. There are a number of specific example of news media businesses expanding their operations or being able to hire more journalists. This has been the Australian experience, when around the World, for several years, the story has been one of journalists being made redundant, less activity, and editions being withdrawn. In such a scenario, to hear of more journalists being employed is a very refreshing change.
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