The Australian Media Code has been drafted by the Australian Competition and Consumer Commission (ACCC) and the Bill introduced into Parliament in December 2020. It’s a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and digital platforms, specifically Google and Facebook.
But what is it really all about? First, some history…
CONTEXT
The code itself came about because of the ACCC Neutral Platform Inquiry around 3 years ago and brought out a bunch of recommendations (including a review of the Privacy Act currently underway). The bargaining code was one of the recommendations and the first to be picked up by the government.
Breaking up big tech and social media companies has become the big story of today, but there’s more to it than that. As I’ve said previously, there are three main legal ways to deal with Facebook, Google, and other big tech players.
One is through privacy rights and data protection, but I think this angle misunderstands the world of data (and is frankly just too late). The best bet is the citizens’ conscience. Or sue in a class action like what has happened with AI in the case of Clearview (it seems like there will be a flood of litigation in the coming year as a result of all this increased talk of late).
Another is the US Section 230, which in spin, is about free speech, but in reality, is about trusting social media companies to do their job when it comes to moderation. Repealing the law would mean mass moderation of everything which would break companies if not the internet (see net neutrality).
So then what’s left is competition/ antitrust.
Competition law is really about breaking up monopolies. That’s what the US AG, FCC, and Texas suits against Facebook and Google are about. The UK also has a commission on Facebook buying Giphy which the Australian ACCC is also investigating. The ACCC also just released an interim report on its Digital Platform Services Inquiry. And the EU has taken more steps on the privacy front but seem to be open to fining companies too (but this has affected the way other countries go about dealing with Facebook and Google).
DATA
The thing about Big Tech and social media is that they’re not just a few apps we use. Google does not just search, or YouTube, or Gmail or Maps, it’s an entire background ecosystem of DATA. Google has monopolies across different markets, but especially in advertising, in which Google becomes the intermediary between advertisers and internet websites. This is where Google gets its money from. It also means it’s easy for Google, for example, to profit off someone advertising guns on an MSNBC website without MSNBC realising it.
Google has its hands in countless pies. Amazon argues that they’re not a monopoly despite being a billion-dollar company because they have small market share in each of the markets they’re in or that not all markets they’ve entered have been a success (web services, Artificial Intelligence, etc) but that’s just not true. It’s a monopoly in MANY different markets.
The above graphic from the ACCC Interim Report doesn’t even include AMP, which was supposed to make websites load faster but actually just allowed Google to better control advertising. Google Chrome and Search Ads 360 is also left out. This is why governments can’t keep up.
The thing is that governments need to lean into what researchers have already worked on (the AG suit is a good example of that, the ACCC builds on that suit even more even though it officially started earlier). If governments brought on the right people, we might get somewhere, but unfortunately Big Tech and US government tends to be quite friendly, though President Biden has indicated things might change.
THE CODE
So the Code allows for certain media to bargain with Google for Google to pay for media links, and then there’s an arbitrator if they can’t agree on a price. But that’s not the only part of the Code. The Code also has a non-discrimination clause which is like a public utility idea of net neutrality. So Google can’t discriminate against media actors who bargain using the Code. But ranking is discrimination. Even the creator of the internet made a submission and said free linking is fundamental to the internet and the Code could be applied in other jurisdictions.
The bargaining code itself is a really interesting idea and some good stuff to come out of the ACCC, and it’s absolutely based on policy (though I’d be interested to see why they went with a negotiated price instead of a tax). It’s not exactly well-drafted (what’s new?), but I am glad to see this world first. So what’s really the problem?
Media is built on advertising dollars. When the internet came in, the media lost a lot of advertising and money, and then when they tried to move online, clickbait was the easy way to get people on your site, since it does well in Google search rankings and makes money, even if it’s not good journalism.
And then where media usually goes direct to advertisers for traditional print, now Google takes a cut of that online advertising and media gets less. So the media has always had little bargaining power when it comes to the internet, and the (often unspoken) reason the media is in this position is because of its profit model.
The ACCC said that for every 100 Australian dollars (USD$77.26) spent by advertisers online in 2019, Google took A$53, Facebook got A$28 and just A$19 went to other websites and ad tech.
The other thing is that although it’s similar to the France agreement, in France it seems to be for ‘contributions to political and general info, daily volume of publications and monthly internet audience’. But in Australia, the Code is for bargaining. So ours is really very different from what has happened elsewhere.
THE MEDIA
The thing is, the very people reporting on the Code also have an explicitly direct interest in this story. I’m not sure there could be a bigger conflict of interest. So the way the media is reporting on the Code has been interesting, to say the least. I’m not a journalist, but the reason I write about this stuff is that it affects all of us.
So while the Australian government seems to be supporting media through the Code, users and small media players don’t have much say in the bargaining and so will suffer, likely from the payment issue but also from the fact that they are small and less able to compete with the big media players like Seven and Nine.
On another note, the media is necessary for democracy to function and as we’ve seen elsewhere in the world, the media is not really making a name for itself right now.
And, perhaps more fundamentally, data and its commodification will continue to be the centre of the business model, which I don’t agree with at all. It doesn’t justify good journalism, and for a quick example, the government could argue not to fund the ABC because they supposedly have other revenue sources.
Google offered News Showcase to news media, and media aren’t happy with this because this is all Google infrastructure, Google format, Google data, and they would have to get rid of their paywalls. Meanwhile, news media would get some extra insights about user data and algorithms, they wouldn’t have already through Google analytics for example.
There were reports of certain parts of the media (Murdoch) benefiting the most, which would probably only occur if ABC / SBS are included in the Code (this was not going to be the case initially). There were also reports of Google conducting experiments regarding search that hid Australian media though arguably this is for them to collect data to show news media and show profit imperatives.
Google is pretty special, as opposed to Facebook. It has significant bargaining power when it comes to search, when it comes to advertising, and when it comes to dealings with news media.
Hence, it threatened to stop providing Google Search in Australia, which I think is a genuine threat and one that, as a private company, cannot be stopped. (If you want an alternative, try Bing or Duck Duck Go; and don’t complain about its usability because it’s based on consumer demand, and since I’m on it, a public search engine is nice in theory but absolutely impossible in terms of resources).
But Google seems to be making significant progress in making deals with Seven, Nine, The Guardian Australia, and the ABC. Which can’t be said for Facebook.
Facebook is a little different, and I think has significantly less bargaining power than Google does. It doesn’t have a lot of the backend stuff that Google does. But what it does have is REACH and ENGAGEMENT—people are on Facebook all the time and get their news there. More than half of Australians get news from social media as of February 2020 (and I imagine the pandemic has increased that).
Facebook isn’t interested in making deals, but rather straight out said they would ban news content in Australia. Which is alarming, to say the least, and again a genuine threat.
The media is spinning on this too—the whole argument makes big media look like victims, but the real people who lose are the tiny media players who likely aren’t going to be paid and will suffer from market share issues.
AND WHAT’S THIS ABOUT MICROSOFT?
It’s interesting that Microsoft has come down on the side of the Australian government and the Code. As another Big Tech player though, I don’t think particularly well of what they’re trying to do—like Apple, they are not supporters of small business or consumers either, though they might get away with it. (Don’t get me started on Amazon.)
SO WHAT NOW?
Facebook and Google COLLECTS, NEEDS, PROFITS FROM, the data it gets when you’re on products they don’t control and you’re not intending to interact with them. It’s not about keeping your attention on the app anymore. That’s why we see them fearing iOS privacy changes, data protection (privacy) laws and antitrust scrutiny. They are not here for small business or private citizens.
The good thing for the consumer is we get less clickbait stuff, as I don’t think it is good we get news from social media generally because we only read headlines. But the fact is, that consumers do get news from social media, and that’s not going to end.
What about Facebook “connecting people to make the world better”? What about Facebook “supporting journalism”, which they say they’ve invested in Australia? Never mind the constant talk of fighting misinformation and fact-checking. The idea that Facebook can regulate itself is rubbish.
The thing is, when it comes to genocide, there are crickets at Facebook. But when it comes to money, in a democratic country where there is the rule of law, it throws free press and the public sphere under the bus.
So I suppose it comes down to the consumer at the end of the day – we’re voting with our fingertips. But it’s really sad for artists and small business who make their living through social media, and is why I ALWAYS advise you get your mailing list and website together. Who knows what could happen to your social media. You don’t own any of it.