ACCC seeks advice on addressing Facebook and Google 'bargaining power imbalances'

The watchdog is hoping to stand up a code of practice for the likes of Facebook and Google to follow when displaying Australian news content before the year is out.

The federal government is hoping to make tech giants such as Facebook and Google pay for Australian content if it is a source of profit, and the country's consumer watchdog is leading the charge on a mandatory code of conduct to address "bargaining power imbalances" between news media businesses and digital platforms.

The government in April announced it was heading down the path of developing a mandatory code, in lieu of coming to an arrangement with digital platforms.

The Australian Competition and Consumer Commission (ACCC) on Tuesday published a Mandatory news media bargaining code Concepts paper, seeking feedback on how best to address the imbalance in bargaining position between news media and particular digital platforms, posing 59 consultation questions.

See also: Frydenberg says Canberra will not bow to threats from Google and Facebook

The ACCC is seeking, first of all, a definition of "news" and if it should require that content be produced by professional journalists or published by a professional news media business, or if it should be limited to whether the content creator is a part of an industry body.

The paper [PDF] suggests four potential methods for reaching its goal: Bilateral negotiation, mediation, and arbitration; Collective bargaining; collective boycott or "all in/none in"; and collective licensing or fee arrangements.

The first potential bargaining framework involves bilateral negotiations between each of the digital platforms and news media businesses, "supported by recourse to independent arbitration if a negotiation does not result in a commercial agreement".

A collective bargaining framework would see Australian news media businesses be able to negotiate as a collective with each of Google and Facebook, in order to secure more favourable commercial terms for the use of content than they might achieve through individual negotiations.

The collective boycott or "all in/none in" approach would allow commercially funded news media businesses to put in place a collective boycott if commercial negotiations are unsuccessful.

"A collective boycott, or the threat of a collective boycott, may encourage each of Google and Facebook to offer news media businesses more appropriate remuneration for the use of their content," the ACCC said.

Under the final proposed framework, the determination of relevant fees to be paid to news-makers would be baked into the code itself, via an arbitrator, or through collective negotiations between news media businesses and each digital platform.

"Such negotiations could be conducted by a collective of news media businesses directly, or through an intermediate body such as a collecting society," the ACCC wrote. "In addition to assisting with the setting of fees, a collecting society could assist with the collection and distribution of appropriate remuneration."

The ACCC posed 13 questions relating to the different types of collective bargaining frameworks.

See also: Google says it doesn't make money from Australian news, kind of

Noting Facebook and Google have each become unavoidable trading partners for Australian news media businesses in reaching audiences, the ACCC intends for the code to include mechanisms to allow the addition of other digital platform services, "should other digital platforms attain a significant imbalance in bargaining power in their relationships with news media businesses in the future".

In addition to Facebook News Feed and Google Search, the ACCC is asking if Google News; Google-owned YouTube; AMP, which it said was closely associated with Google, including through hosting on Google; Google Assistant voice activation services and Google Home devices; Android TV; Google's ad tech intermediary services; Facebook Instant Articles; Facebook Watch; Facebook-owned Instagram; Facebook-owned WhatsApp; and the yet to be launched in Australia Facebook News Tab should also be covered by the code.  

With digital platforms gathering copious amounts of data on its users, the ACCC said the code would need to address this "information asymmetry", and said it may be appropriate for the bargaining code to include mechanisms requiring each of Google and Facebook to maintain and provide news media businesses with an up-to-date list of the types of user data they collect on news audiences.

The watchdog also wants "algorithmic transparency", requiring Google and Facebook to provide notice of significant algorithm changes to news media businesses, saying this may mitigate the potentially substantial impacts such changes may have on news media businesses' operations.

The prioritisation of original news content was also discussed, as well as how to handle news items that are behind a paywall. It also asked if "quality journalism" should be distinguished from other forms of content that are featured on digital platforms.

Under enforcement, the ACCC is seeking views on what the most appropriate and effective mechanisms for resolving disputes and enforcing compliance related to the bargaining code, as well as what enforcement mechanisms should be included in the code.

The move forms part of the government's response to the ACCC's Digital Platforms Inquiry, which in July made a total of 23 recommendations that covered competition, consumer protection, privacy, and media regulatory reform.

Submissions close 5 June 2020 and a final code is expected to be settled "soon thereafter".

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