Chair of the Australian Competition and Consumer Commission (ACCC) Rod Sims has said the majority of issues Facebook and Google have raised with the News Media Bargaining Code had been addressed in the legislation that passed the lower house in December.
Sims said Google and Facebook just don't want the code.
"Google and Facebook like to do things on their terms. I think the code does what it's intended to do. It is workable. It allows for a process of negotiation … we've seen these sorts of things work in the past where you've got negotiate-arbitrate regimes, so I think this is just something Google and Facebook don't want," he said.
"They don't like the idea of arbitration, they want -- they talk of commercial deals, where they're in full control of the deal. In my view, that's not a commercial deal."
Sims said every monopoly he's ever come across, he's heard the line "don't regulate us, leave it for commercial negotiation".
"What they mean is leave it to 'take it or leave it' because we're the monopoly. So the only way you can get a commercial deal is if you've got some muscle in the arm of the news media businesses; that muscle is the code," he said.
"I'm not saying it equals things up, but it certainly helps. And so that's the only way -- the code is the only way you get commercial deals."
Facebook and Google have been engaged in a stoush with the ACCC since August over the code, which, according to the government, is necessary to address the fundamental bargaining power imbalances between Australian news media businesses and major digital platforms.
But according to Google, the code is "unfair", saying also it puts the "way Aussies' search at risk". Google believes it contains an unfair arbitration process that "ignores the real-world value Google provides to news publishers and opens up to enormous and unreasonable demands" and similarly Facebook takes issue with the code, having threatened to pull news completely from its Australian platform.
On Friday, Google threatened to pull its search engine from Australia.
"Given this as a code that they don't want, I think it's understandable that they're going to be saying a range of things to prevent the code coming into force," Sims said, pointing to the threats made by both tech giants.
"There was never going to be, I think, a code where they said, 'Oh, this is terrific, we're really happy with this' -- that was just never going to happen. So I think where we are, was not unexpected, in the sense that they have many concerns with it. I think that's what you'd expect them to say."
Sims said he's unsure if these are empty threats.
He also said the government has done "a lot of listening" when it comes to the concerns of the tech giants.
Earlier in the day, representatives from both Google and Facebook revealed they were respectively ready to produce draft voluntary codes of conduct on how to remunerate Australian newsmakers for their content, but they were blindsided by the decision for the ACCC to step in and develop a mandatory one.
"We formed the view that, in our view, a voluntary code wasn't going to achieve the objectives the government was seeking to achieve," Sims said in response. "Therefore, a mandatory code was required to meet those objectives.
"The voluntary arrangements were, in our view, completely in the hands of Google and Facebook. They were going to be deals [that were] very much on their terms. There were going to be some form of offers, but they were going to be very much 'take it or leave it' offers that weren't going to meet the government's needs and weren't going to meet the needs we saw for commercial bargains where you've got equal bargaining positions, equal bargaining power."
Without any clause written into the code dictating that publishers must pass the money on to the actual creators of the content, and ignoring the layoffs that have plagued the industry for the last couple of years, Sims reckons the code will result in more journalists in Australia.
He said money gained by publishers through the process will cover a "substantive and meaningful" amount of journalism and therefore "make a significant contribution to journalism in Australia".
"I think it'll both stem some of the problems and allow extra journalists to be employed," he said. "I think it'll be a significant increase in journalism, compared to the alternative, with this code. And therefore, with more journalism, we'll get more diversity in media, which is good, and we'll get more coverage of more things which just can only help Australian society."
Somewhat counter to his point of boosting journalist numbers was Sim's revelation that there won't be many news organisations dealing with the code.
"Facebook was saying that has to deal with thousands of publishers or a thousand publishers -- the only people who've got to deal with it are the people who produce core news. And I don't think there will be that many negotiations at all … there'll be a lot of collective bargaining, but the only companies that are allowed to bargain are those who produce core news," he said.
"If you don't produce core news, I'm sorry, you don't get on the playing field. So there's not that many people they're going to have to deal with."
What constitutes "core news" was not discussed outside of it being the likes of the ABC, SBS, The Guardian, Murdoch publications, TV stations, and Nine newspapers.
HERE'S MORE 'NON-CORE' NEWS