Opinions Divided As Government Enforces Mandatory Code For Tech Giants

The Australian Government has made the move to enforce a mandatory code to govern the relationship between digital platforms and media businesses.

Following the release of the ACCC’s Digital Platforms Inquiry last year, the government had initially left it up to the parties involved to create a voluntary code in relation to the report’s findings.

This was to be finalised by November.

However, “insufficient progress” towards creating a voluntary code has forced the government to step in, said Treasurer Josh Frydenberg in an announcement this morning.

“The government has taken the decision to move from a voluntary to a mandatory code, the preparation of which will be led by the ACCC,” Frydenberg said.

“The code will include a number of provisions, including those related to value exchange and revenue sharing; transparency of ranking algorithms; access to user data; presentation of news content; and the penalties and sanctions for non-compliance.

“The intention is to have a draft code of conduct released for comment by the end of July and legislated shortly thereafter.”

In particular, payment of content is expected to a point of contention for involved parties, with previous attempts resulting in “no meaningful progress”.

Media businesses maintain they should be reimbursed in some way for content that appears on such platforms, while Facebook and Google will argue that by bringing more eyeballs to this content, they are helping these media businesses generate advertising dollars.

“It is only fair that the search engines and social media giants pay for the original news content that they use to drive traffic to their sites,” said Frydenberg.

Both Facebook and Google had been working with local media companies to develop a voluntary code prior to this announcement.

Australia’s move towards the mandatory code follows similar efforts in Spain and France.

Tech giants respond

Frydenberg’s announcement has already drawn the ire of Facebook, which had been working towards creating a voluntary code.

“We’re disappointed by the Government’s announcement, especially as we’ve worked hard to meet their agreed deadline,” said Facebook Australia and New Zealand Managing Director Will Easton.

“COVID-19 has impacted every business and industry across the country, including publishers, which is why we announced a new, global investment to support news organisations at a time when advertising revenue is declining. We believe that strong innovation and more transparency around the distribution of news content is critical to building a sustainable news ecosystem.

“We’ve invested millions of dollars locally to support Australian publishers through content arrangements, partnerships and training for the industry and hope the code will protect the interests of millions of Australians and small businesses that use our services every day.”

Like Facebook, Google has also been working with publishers leading up to the announcement.

“We’ve worked for many years to be a collaborative partner to the news industry, helping them grow their businesses through ads and subscription services and increase audiences by driving valuable traffic,” a Google spokesperson said.

“Since February, we have engaged with more than 25 Australian publishers to get their input on a voluntary code and worked to the timetable and process set out by the ACCC. We have sought to work constructively with industry, the ACCC and Government to develop a Code of Conduct, and we will continue to do so in the revised process set out by the Government today.”

media businesses react

The government’s move to step in and enforce the code has drawn praise from Australia’s biggest media businesses.

News Corp Australasia executive chairman Michael Miller said the decision will help protect the future of Australian journalism.

“For two decades, Google and Facebook have built trillion dollar businesses by using other people’s content and refusing to pay for it,” he said.

“Their massive failure to recognize and remunerate creators and copyright owners has put at risk the original reporting that keeps communities informed.

“The decisive move by the Australian Government to go directly to a mandatory code of conduct between the international tech giants and Australian news media companies is a vital step that can help secure the future of Australian journalism.”

Nine CEO Hugh Marks also welcomed the move.

“We congratulate the Government for taking swift and decisive action on this important issue,” he said.

“Now more than ever, it’s important the global technology companies take some responsibility for contributing to our society through financially supporting the creation of quality Australian content.

“We look forward to working constructively with the Government to get the settings in place for this to operate in a simple manner.”

Free TV CEO Bridget Fair applauded the decision.

“Today’s decision is groundbreaking and we are grateful to the Morrison Government for their commitment to ensuring that Australians will continue to have access to quality Australian content,” she said.

“Google and Facebook derive huge value from the news and premium content generated by Free TV broadcasters, but their extreme market power means they don’t pay a fair price for it. The serious impact of the COVID-19 crisis on the Australian media sector has made the case for Government intervention crystal clear.”

ViacomCBS Australia and New Zealand chief content officer and EVP, Beverley McGarvey added: “Having the ACCC develop the Code(s) was always the best option as they are the experts in ensuring a level playing field in commercial bargaining environments. We look forward to meaningful discussions with the competition regulator and the Government in the weeks ahead.

“It’s important to remember that digital platforms have been benefitting from all of our program-related content for years so for the Code to be truly meaningful it needs to cover all premium content developed by a media company, not just news.”

Seven West Media CEO James Warburton commented:

“This is a welcome move from the Australian Government – not only to act, but to lead internationally on this critical issue.

“The media industry is dependent on the value of its content being recognised by all users – foreign digital platforms in particular. In the past month our news content alone has reached millions of Australians – it’s only right when this is accessed via third party platforms its creators are fairly compensated.

“We fully embrace the opportunity to work closely with the government and the ACCC to implement this long-awaited action.”

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