Should Tech Giants Pay Publishers for Content?

The Australian Competition and Consumer Commission (ACCC) is working through a Code of Conduct for big tech companies including Google and Facebook.

The Code, which was mooted last year as a result of the landmark digital platforms inquiry in December, will address a number of issues that arose from the inquiry, including user privacy and greater transparency around how information collected is used.

Profiting from content

Another key concern was the inquiry’s finding that in Australia, Google and Facebook are profiting from content generated by Australian media organizations.

Media companies have been unsuccessful in their early negotiations with the tech giants and so Treasurer Josh Frydenberg is now fast-tracking the code. He wants the document complete by July 2020, and despite originally intending for it to have ‘voluntary’ buy-in from industry participants, says the code will now be mandatory.

The Code of Conduct will outline requirements for these big companies to negotiate in good faith how to pay news media for use of their content, advise news media in advance of algorithm changes that would affect content rankings, as well as prioritise original source news content in search page results, and share data with media companies.

The code will also include penalties and binding dispute resolution mechanisms for negotiations between the digital platforms and news businesses. It will also define news content that would be covered by the code, and will encompass services beyond Google search and Facebook’s main platform, such as Instagram and Twitter.

‘Fair playing field’

This will even the playing field for Australian media companies which have been hard hit by Covid-19 suffering significant declines in ad revenues, while having to work with skeleton staff, at the same as continuing to meet public expectations that they will continue to provide quality up-to-date news and information about the coronavirus and its impact on business and society in Australia and around the world.

Several large Australian media companies have asked staff to take pay cuts and several newspapers have halted production because of a sharp decline in advertising revenue in the past few months.

Digital platforms have disrupted the media, changing the way Australians receive the bulk of their news and entertainment, making it increasingly difficult for them to build and maintain a loyal following.

Grants and advertising credits available

Facebook (Australia and New Zealand) has reacted unfavourably to the news of a ‘mandatory code’, saying that it has invested “millions of dollars” to support Australian publishers, through content arrangements, partnerships, and training. It recently pledged to invest $100 million in the news industry.

For it’s part, Google has offered what it estimates to be $340 million in advertising credits to it’s small and medium-sized business customers worldwide so they can ‘stay in touch’ with their customers over the remainder of the year.

The company says it is proactively working with media companies and the ACCC to reach agreements. But neither Google or Facebook, in the past, been known to be co-operative with the Australian government.

For nearly a decade Google fought the ATO over tax obligations, finally agreeing to a settlement last year, involving no admission of liability for $481.5 million after an audit of its tax practices between 2008 and 2018.

Facebook also disputed it’s tax obligations with the ATO, settling last year, for a sum that has never been disclosed. The social media platform also came under fire from the Australian Electoral Commission in 2019 for publishing ‘fake news’ about the Australian election and was forced to remove several pieces of content that were not true.