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