Media Bargaining Code enters Parliament despite Google and Facebook's best efforts

The legislation mandating an Australian News Media Bargaining Code entered the House of Representatives this week, but its passage will have to wait until next year.

The bargaining code, according to the government, is necessary to address the fundamental bargaining power imbalances between Australian news media businesses and major digital platforms.

It was originally intended for the code to be voluntary, but according to Treasurer Josh Frydenberg, it was clear the code needed to be mandatory, as "deals could not be struck that would see the digital platforms pay for original, journalistic content".

"These digital platforms were unavoidable trading partners for traditional news media businesses," Frydenberg said during a press conference announcing the code was entering Parliament.

The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 introduces a framework that aims to allow and enable commercial deals to be struck between traditional news media outlets -- now including the ABC and SBS -- with Google and Facebook.

"We want deals to be struck between the parties outside of the code … but if [they're] unable to reach a commercial agreement, or unwilling to reach a commercial agreement, then a final offer arbitration model will take effect," he said.  

"We have reached a fair and a balanced outcome."

See also: Not happy Jan: Google likens media bargaining code to using the Yellow Pages

The revised code now contains a "two-way value exchange", which Frydenberg said "money will only flow one way" and that is into the hands of news outlets. He also said it would also set a series of minimum standards that the digital platforms have to adhere to.

"This is a huge reform, this is a world first, and the world is watching what happens here in Australia," he continued. "Our legislation will ensure that the rules of the digital world mirror the rules of the physical world."

Another amendment is the exemption of Facebook's Instagram and Google's YouTube, at least in the first instance as the responsible minister, currently Frydenberg, has the power to designate a service that is subject to the code.

The Australian Competition and Consumer Commission (ACCC) has been engaged in a stoush with the two digital giants since August over the code.

Google has labelled the code as "unfair", while also saying 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.

Also of concern to the digital giants was the requirement for them to give news media businesses 28 days' notice of algorithm changes that are likely to materially affect referral traffic to news, algorithm changes designed to affect ranking of news behind paywalls, and any substantial changes to the display and presentation of news and advertising directly associated with news.

"28-day advance notice is really a 28-day waiting period before we can make important changes to our systems," Google said previously.

The Bill [PDF] declares the responsible digital platform must ensure that: Notice of the change is given to the registered news business at least 28 days before the change is made; or if the change relates to a matter of urgent public interest, no later than 48 hours after the change is made.

Frydenberg said Facebook and Google would be required to abide by the law if it is passed through. 

"Facebook and Google have indicated that there are certain red lines that needed to be satisfied if they were going to stay in Australia," Shadow Communications Minister Michelle Rowland said. "But let's face it: It would be a detrimental thing for Australian consumers to lose this form of innovation, this technology -- particularly as ... Australians are accessing their online news through these platforms."

The Bill is expected to go to the Senate Economics Legislation Committee for scrutiny, which is due to report back on 12 February 2021, but the federal opposition wanted something legislated before the Christmas break.

"When it comes to this news media code, the government has been dithering, delaying, and stuffing around for a year now," Shadow Treasurer Jim Chalmers said. "This is another stunning example of a government that chases headlines but just doesn't deliver."

Labor has said on many occasions that it is prepared to support, in principle, efforts to ensure that the playing field is levelled between the tech platforms and news organisations. But Chalmers said the uncertainty that's been created by the big announcements and no delivery has made it difficult.

See also: Labor logic: Newspapers screwed up online classifieds so tech giants should pay up

The Australian Taxpayers' Alliance has condemned the Bill, calling it "unfair regulation". Policy director Emilie Dye said forcing platforms to subsidise Australian media was, in political circles, called protectionism.

Elsewhere, the Digital Industry Group Inc (DiGi), a non-profit industry association advocating for the digital industry in Australia, has wrapped up the first round of consultation on a code of practice on how digital products and services would address disinformation.

DiGi's members are Google, Facebook, Twitter, eBay, Verizon Media, RedBubble, Go Fund Me, and Change.org.

In December 2019, the Australian government asked the digital industry to develop the code in response to policy as set out in Regulating in the Digital Age: Government Response and Implementation Roadmap for the Digital Platforms Inquiry. DIGI volunteered to develop the draft for the industry and expects it to come into effect in 2021.

In the draft code [PDF] published in October, DiGi says the code is principally designed to express the commitments made by Digital Platforms to address the propagation of disinformation.

It sets out six objectives with a bunch of outcomes, including implanting safeguards against disinformation, disrupting how disinformation can be spread via advertising and monetisation incentives to platforms to display such ads, and empowering consumers to make better informed choices of digital content.

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