Australia’s news media bargaining code is a form of ransomware, and someone paid up

We need to do something. This is something. Therefore we need to do it. This is the logic that led to Australia’s wondrously strange news media bargaining code.

Let’s take a step back. There was indeed a problem, a problem that goes back more than a quarter of a century. It’s that the internet changed everything. But it was only ever really a problem for news business that failed to adapt.

News is expensive to make. That’s why for most of the 20th century, commercial news operations bundled it with advertising, which was the main income stream, and cheap filler content.

The audience got the whole bundle in one lump, whether it be on dead trees whose slaughter and distribution they paid for, or via radio or TV.

But then the internet unbundled everything.

People who wanted the advertising went straight to sites that were nothing but ads for real estate or used cars or second-hand furniture or people who wanted a date.

Advertising also moved to places like Facebook, which has personally relevant content that people give them for free, or Google, which provides a whole bunch of useful services.

It turns out there’s fewer people who just want quality news than the big old news factories had thought. The data finally showed them how few people read stories past the headline. Most of those people aren’t willing to pay for all the news content when they only want a few bits and pieces.

Profits soon plummeted. Journalists were sacked. News got cheaper, but not in a good way.

Meanwhile, most people are happy with reading the snippets of news they see on the Facebooks or the Googles, or even just the headline. The tech giants get some ad revenue from that, but the news factories get nothing unless people click through.

So as I say, there’s a problem, but only for the old news factories.

The news media bargaining code in a large-ish nutshell

The problem, according to the Australian Competition and Consumer Commission (ACCC), is an imbalance of power. Poor little Australian news businesses can’t negotiate fairly with big global tech companies.

They have a point. Nine Entertainment, which includes TV stations in the Nine Network, a radio network, and all the newspapers previously owned by Fairfax, has a market capitalisation of around AU$5 billion. Facebook has more than 15 times that amount just lying around in ready cash.

The fix has ended up being the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2021, which was passed by Parliament on February 25 and became law on March 2. As a piece of legislative drafting, it’s a mess.

The intention of the code is simple though: “Hi, big platform, I’m a news business. You’re using my content, so let’s make a deal.” The weirdness comes when you look at the details.

First, a news business has to register with the Australian Communications and Media Authority (ACMA). But not every news business can register.

The business has to produce “core news content”, which is defined as “content that reports, investigates or explains (a) issues or events that are relevant in engaging Australians in public debate and in informing democratic decision-making; or (b) current issues or events of public significance for Australians at a local, regional or national level”.

News business that are solely about sports, entertainment, or anything else don’t get to play. However if the business does produce core news content, their sports and entertainment stories do become part of the deal.

It also has to be a corporation, not an individual, with revenue of at least AU$150,000.

A solo investigative journalist doesn’t get to play either, no matter how significant their work.

The newsmaking also has to meet certain professional standards, but that isn’t a bad thing.

Once the news business is registered with the ACMA, it can then demand that any “designated digital platform service” which “makes [its] content available]” make a deal under the code.

“A service makes content available if: (a) the content is reproduced on the service, or is otherwise placed on the service; or (b) a link to the content is provided on the service; or (c) an extract of the content is provided on the service,” says section 52B(1) of the code.

Who gets to decide whether something is a “designated digital platform service”? The minister for communications, when they’re of the view that the platform has a “significant bargaining power imbalance” with Australian news businesses, and perhaps isn’t making a “significant contribution to the sustainability of the Australian news industry through agreements relating to news content of Australian news businesses (including agreements to remunerate those businesses for their news content)”.

If the platform and the news business can’t reach agreement, then there’s a whole process of arbitration that gets run by the ACCC.

As part of the deal, the platform has to share audience data with the news business. It also has to give 14 days notice of any change to the ranking algorithm, unless the change “relates to a matter of urgent public interest”.

Of course, a platform can avoid getting designated, and avoid this whole process, by making acceptable deals with the news businesses in the first place.

Google, for example, has already made deals with more than 70 Australian titles as part of its Google News Showcase.

So, who’s the bad guy here?

It’s easy to paint Facebook as the enemy, at least, if you’re a journalist at one of the old media factories. They’re “stealing” content, apparently. Plus the big bully blocked Australian news to show their strength, causing a massive drop in traffic to Australian news sites.

Facebook literally held Australian news sites to ransom until the government changed its news code plans.

It’s also easy to paint the legacy media factories as the enemy. They’re complaining about the free referral traffic that brings them revenue, and demanding the government organise some money for them because their business isn’t doing so well.

The larger news businesses literally held Facebook and Google to ransom, demanding money or they’d withdraw their content and then — well, Facebook called that bluff. Maybe that one wasn’t such a good ransom attempt.

The government also held the platforms to ransom, demanding that they reach an agreement with the news businesses or else they’d, um, force them to reach an agreement with the news businesses.

So everyone’s the bad guy.

But also, everyone wins. Except you and me.

The news businesses get some money, though they’re not really forced to spend it on more or better journalism. The platforms get to make the problem go away for a while without that much cost. The government gets to boast about putting Australians in charge.

Except you and me, that is. There’s no win for us.

Money is being transferred from one kind of massive corporation to another, and our user data is being shared more widely, with no guarantee that any of it will lead to more or better journalism. 

Well done, Australia.

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