The world was closely observing Australia’s pioneering News Media Bargaining Code when it was launched in 2021. This was a government that wanted to stand up to the big tech companies in the world and demanded them to pay for the news material that helps them with their advertising income and their user base. Fast forward to today, and that original legislation is undergoing a major shakeup that could have a big impact on the digital platform/media relations again.
The Australian government’s announcement of new parliamentary media licensing laws this week is big enough to deserve new attention, both from the tech industry and media watchers around the world. The revised rules will mean that big tech firms based in Australia will need to negotiate terms with a minimum of eight media firms, compared to six in the original draft. It is a significant extension of the scheme’s scope and may open the door to other voices in the commercial marketplace that is a key part of the Australian media policy.
The bill’s core purpose is to force advertising money to flow to Australian news companies, continuing Canberra’s efforts to reform the advertising industry. The bill is at its essence a continuation of Canberra’s efforts to shift advertising money from the big tech firms to Australian news companies. The core concept doesn’t change: if users engage with news content on the Google and Facebook platforms, it will yield substantial advertising revenue for the platforms. The government says it’s fair that at least some of that money should come back to the creators of the content that makes the platforms more useful for users.
Naturally the addition of extra flexibility in the distribution scheme is the most interesting aspect of the new legislation. Minister for Communications Anika Wells captured the government’s thinking when she said Australians were consuming news across a range of platforms and sources, requiring adjustments to ensure the smaller, more diverse media sector had more access to these. The recognition of media diversity as a policy objective is a development from the previous one, which emphasized the need to compensate existing media.
A special provision for the Australian Associated Press, the country’s former industry-owned newswire service, has been included in the new provisions, and it has been made a not-for-profit organisation. The amount raised from the scheme will be shared with AAP at 5%, highlighting its critical role in public-interest journalism in the nation. This special funding mechanism recognizes that a thriving media system requires strong wire services that provide text, photos and video to media outlets across the country, which faced the possibility of ending in 2020. This is in part a growing awareness that, in many ways, the infrastructure of journalism is as important as the names of its mastheads that are so well known.
The return of a limit on deals per individual comes with a bit of nuance to the scheme. The government has reintroduced a cap to potentially limit any one deal to a maximum of 25% of the platform’s liability under the law. The levy is fixed at 2.5% of a company’s Australian advertising sales, but if a company enters into a commercial agreement with a media organisation, the amount of the agreement will be subtracted from the amount of levy that is payable. This provides a kind of incentive model that enables the platforms to reach an agreement, but where no one media outlet can obtain an undue amount of the available money.
It is fortunate that these changes occurred at the same time because of the wider context. Australia’s original 2021 media bargaining law was viewed as a bold experiment – a law that other nations eye with interest and caution. The law mandates that Google and Meta reach mutually agreeable deals for paying news publishers for using their news content, including the possibility of a government-appointed arbitrator that would be able to impose terms on the negotiations if they don’t come up with an agreement. The backstop mechanism was effective and it gave the legislation teeth and prevented platforms from just walking away from the negotiating table.
Originally under that deal, the tech giants inked a number of commercial deals with Australian news publishers. These deals helped ease the pain for a struggling industry and set a precedent that it was possible to pay for news, without the business model imploding. But the scene has changed greatly since then. Meta’s decision to cease payment for news content in Australia and other markets pushed the government back to the drawing board, and spurred the current redesign of the regime.
The new bill tries to remedy some of the flaws that were revealed in Meta’s position. The government is attempting to establish a more robust system that would be less vulnerable to any one platform as it encourages deals with other media firms and places limits on the amount any one company can pay. It’s also noteworthy of the explicit support for AAP, which indicates that the government considers providing a system level-support for journalism infrastructure as a must, irrespective of market dominance of any of the platforms.
Australia’s experiment is still in progress and for those who are watching, there are valuable lessons to be learned. The government has demonstrated an ability to tweak the legislation in the light of experience and changing circumstances, rather than throwing it away when it gets tough. This pragmatic is different from those jurisdictions where no steps have been taken or where regulation has been found to be too rigid in view of changing market realities.
Those who oppose the legislation have had good reason to question whether or not this is really good for consumers, or merely a repurposing of capital from one group of businesses to another. However, there have been some doubts from industry sources whether the complexity of the scheme would impose an administrative burden that would offset the advantages, especially for smaller media companies that might not have the resources needed to deal with complicated negotiations with tech giants. All these are valid questions that need to be taken into account alongside the government’s declared aims to encourage public interest journalism and media diversity.
Backers cite the urgent need to find sustainable methods of journalism funding, especially in the digital era in which many traditional revenue streams have been eroded. While they agree that Australia’s position is far from perfect, it is a worthwhile effort to tackle a fundamental imbalance between tech giants from other countries and local content creators. That other countries have tried this means that Australia has something that it could try and replicate, although the specifics are still in flux.
