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Glitch  •  13 May 2021  •  Non-Fiction

Battle of the ‘Bergs: An Explainer

Why Treasurer Josh Frydenberg and the Federal Government took on Mark Zuckerberg and the tech giants... and what happens now?

Illustration by Romy Lester

By Ella Smith
Battle of the ‘Bergs: An Explainer

#What is the media bargaining code?

You’ve probably heard a lot about this media bargaining code recently... or maybe you just noticed more photo uploads from your great-aunt while news and current affairs weren’t on Facebook. In mid-February, news (and temporarily, posts from state health departments, charities and the Bureau of Meteorology) disappeared from our timelines. 

But, why?  

Essentially, the Federal Government wants Facebook to pay news publishers for the content they share on their platform. On the 24th of February, the News Media and Digital Platforms Mandatory Bargaining Code, (we will refer to it as the Code, from now on) passed the Senate, with amendments. Meaning, Facebook has to strike a deal with Australian media organisations, or the government will step in. 

It’s been in the works since April last year, when the Federal Government announced that they’d directed the Australian Competition and Consumer Commission (ACCC) to ‘develop a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and digital platforms, specifically Google and Facebook.’1 These ‘power imbalances’ refer to the advertising dollars that the tech giants are taking away from news publishers, while simultaneously making it harder for them to make money through algorithm changes — just like the 2018 change which prioritised user-posted content in our timelines, decreasing the reach of news content. This saw some sites’ traffic decline by up to 50%.2 Yikes.

It’s essentially in the name of public interest journalism — to ensure that media companies are fairly remunerated for the content that is shared on major platforms. It’s meant to incentivise platforms to enter into commercial deals with news publishers. If they don’t, the Code will be enforced, and they’ll have to pay the publishers an amount determined by an arbitrator. 

But there’s a lot more to it...

#Why so much tension?

The main players in this saga are the Federal Government, Facebook and Google, and the major news publishers: Seven West, Nine Fairfax, Guardian and News Corp. The former and the latter have all supported the bargaining code.

Facebook and Google have not. 

"Both tech giants argued that they were being made to pay for content they hadn’t asked for."

But the government persevered.

Google initially threatened to pull Google Search from Australia, but then changed tack. They maintained their argument that having to pay publishers for a hyperlink and snippet of a page — which has long been viewed as free user traffic for the websites — would ‘break the way Google works’.2 Over the past few months Google made deals with major news publishers, including the four mentioned above, and regional news company ACM. They are also expected to make deals with SBS and ABC.

Facebook took a different route. They argued that the code was unworkable, and tensions between the tech giant and the government have simmered for the past year. They bubbled over when Facebook removed all news from its site on February 18th (for Australians) in direct response to the bill passing the Lower House the day prior. Since then, the bill has passed the Senate after some last-minute amendments that the Treasurer made after negotiations with Mark Zuckerberg.

#What did the amendments do?

The changes are small, but important, and essentially provide these big platforms a way out of adhering to the bargaining code, if they can prove that they have struck commercial agreements with news publishers. The changes necessitate that the Treasurer must assess whether these agreements have made a “significant contribution to the sustainability of the Australian news industry”3, and if they have, they are not answerable to the Code. If the Treasurer finds these agreements unsatisfactory then he will ‘designate’ the platform, enforcing the Code. If this decision is made, the amendments posit that the platforms must receive 30 days notice, during which they could broker more deals. It’s worth noting that if Facebook is designated, they might pull news from their site again. This could be devastating for some publishers, who saw the total number of visitors drop by 16% on February 18th.

Another amendment extends the three-month negotiation period to include an additional two-month mediation period, before the Code is enforced. This makes it easier for platforms to avoid paying a price determined by an arbitrator — the last thing they want — because they’ll have more time to strike a deal.

#What about the small publishers?

There’s been a lot of talk about small and regional publishers losing out in this bargaining code. Big publishers will have some sort of win regardless, either by negotiating a deal with the platforms or through enforced payment if they enter arbitration. Many smaller publishers have been vocal in their dissent, but some have also expressed neutrality or favour towards the Code.

In order to sign up to the bargaining code as a news publisher, you must meet some conditions — including earning $150,000 annual revenue — which immediately excludes smaller, fringe companies. These companies will be less likely to show up on Google Searches, severely limiting their traffic and potential subscriptions. On the other hand, some publishers do meet the conditions, yet are far from the size of behemoths, like News Corp. They would need the resources to bargain with Facebook and Google, but could also see increased revenue and site traffic from this. However it’s too early to tell how positive the influence of this new legislation will be. 

"This saga has also brought the issue of media diversity to centre stage.."

(i.e. the monopolisation of local news by large companies, the struggle for independent organisations to compete) so much so, that it prompted a Senate inquiry in late 2020. While this conversation needs to be had, it goes far beyond the parameters of pros and cons of the Code.

#What about student publications?

Unfortunately, Vertigo was caught up in this rigmarole when their content was taken down as part of Facebook’s retaliation. So were other student publications, including USYD’s Honi Soit and UNSW’s Tharunka. Facebook is one of Vertigo’s key networking and advertising platforms, so seeing their hard work disappear with a click was alarming, to say the least. Even more frustratingly, Vertigo readers do not pay to access this content. Vertigo is funded and supported by the UTSSA, and does not exist to turn a profit. They exist to give publishing opportunities and experience to students, so seeing this stifled was even more disheartening. We can only hope that Vertigo’s reach isn’t impacted by negotiations between bigger fish, especially if Facebook decides to pull news content again.

#What about me?

We can’t be completely sure how this will change the news we see in our feeds and in our searches — it really depends on whether the Code is enforced, and which companies have made agreements. It may not have a significant personal impact at all. Personally, I made the jump to podcasts for my news a while ago and have not looked back. And don’t get me started on all the incredible, independent news pages on Instagram (@zee_feed, @thedailyaus, @shityoushouldcareabout). News sites have also gone into email newsletter overdrive (it’s hard to open a website without getting a pop-up), and they’re a fantastic way to get a snapshot of the news that you want to read, while supporting these publishers. And if you can, pay for your news through donations or subscriptions. This whole Facebook vs. Australian media saga has proven that..

"..quality journalism will stick around, only if we actively support it."


#References

1. News Media Bargaining Code - https://www.accc.gov.au/focus-..

2. News Media Bargaining Code Concepts Paper - https://www.accc.gov.au/system...

3. Google in Australia - https://about.google/google-in...

4. Amendments to the Bargaining code - https://ministers.treasury.gov...

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