ACCC to Develop Mandatory Code of Conduct for Digital Platforms and Media Companies

Friday 24 April 2020 @ 2.31 p.m. | Legal Research

The Federal Government has instructed the Australian Competition and Consumer Commission (“ACCC”) to develop a mandatory Code of Conduct (“Code”) to “govern commercial dealings between tech giants and news media companies”.

According to ABC News, the move forms part of the Federal Government's response to the ACCC's landmark Digital Platforms Inquiry of 2019. In that Report, the ACCC identified a “bargaining power imbalance between news media organisations and large digital platforms, and recommending codes of conduct to govern commercial relationships”.


In a joint Media Release with Communications Minister Paul Fletcher, Federal Treasurer Josh Frydenberg announced that the object of the Code of Conduct will be “to develop a mandatory code of conduct to address bargaining power imbalances between digital platforms and media companies”.

Mr Frydenberg said a mandatory code would help “level the playing field” by requiring digital platforms such as Google and Facebook to pay news media businesses for the content they produce.

Speaking to the ABC News, Mr Frydenberg said:

“It's only fair that those that generate content get paid for it”.

Initially, the ACCC had been tasked with developing “a voluntary code to address the bargaining power imbalance between digital giants and traditional media outlets”. However, the ACCC has since advised the Government that reaching a voluntary agreement over the crucial issue of payment for content would be “unlikely”.

About The Code

ABC News reports it is expected the mandatory code will cover issues including the sharing of data, ranking of news content online and the sharing of revenue generated from news and will be enforced through penalties and sanctions and will include a binding dispute resolution process. The ACCC is also required to provide a new definition of “news content” which will be covered by the mandatory code.

According to the Minister’s Media Release, a Draft Mandatory Code will be released for consultation by the ACCC before the end of July 2020, with a final code to be settled soon thereafter.

Comment and Reaction to the Code

Commenting on the Code to the Sydney Morning Herald ("SMH"), ACCC Chair Rod Sims said payments under the enforceable code, would make a “material” difference to the bottom lines of media businesses whose advertising revenue has been eroded by the rise of the powerful digital platforms.

Communications Minister Paul Fletcher said "COVID-19 has exacerbated financial woes within the media sector."  Mr Fletcher commented to ABC News:

“Media companies are facing significant financial pressure and COVID-19 has led to a sharp downturn in advertising revenue across the whole sector. Digital platforms need to do more to improve the transparency of their operations for news media providers as they have a significant impact on the capacity of news media organisations to build and maintain an audience and derive resources from the media content they produce.”

Nine Entertainment Chief Executive, Hugh Marks praised the government for its "swift and decisive" action:

“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.”

News Corp Australia Executive Chairman, Michael Miller said Google and Facebook had built “trillion dollar businesses” by refusing to pay for other peoples' content. Speaking to the SMH he said:

“Their massive failure to recognise and remunerate creators and copyright owners has put at risk the original reporting that keeps communities informed … The rush of audiences back to trusted news sources during the COVID-19 crisis has been a powerful reminder that real journalism must not be destroyed by companies that take it for their own use and refuse to pay.”

Decline in Ad Revenue during COVID-19 Pandemic

The Guardian reports that dozens of regional newspapers have stopped printing during the pandemic due to the decline in ad revenue, while a number of the largest media companies in Australia have asked staff to take a pay cut or stand down due to the loss in revenue. 

The current pandemic has also affected some of the nation’s biggest media companies, (including News Corp Australia, Seven West Media, Ten Network and Nine Entertainment), have all been cutting costs in the past few weeks. News Corp Australia has stopped printing 60 community newspapers and has asked staff to take holidays and work a shorter week, while nine newspapers have stopped printing sections which are not getting any advertising in the current environment.

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