Table of Contents
Introduction
The Parliament of Australia, on 24th February 2021, passed the world’s -first ever law that will make digital giants such as Facebook and Google to pay local publishers for the news content. “News Media and Digital Platforms Mandatory Bargaining Code”, agreed between Australian Treasurer Josh Frydenberg and Facebook chief executive Mark Zuckerberg, are passed with amendments. This code is drafted by Rod Sims, Chairman of the Australian Competition and Consumer Commission (ACCC). In this article, we will discuss about the need, circumstances that led Australian Parliament to pass the law and various other perspectives.
About the Australian law
The law is developed after three-year of public consultation and in-depth analysis by the anti-trust regulator seeks to address the market power imbalance between the news publishers of Australia and digital giants like Facebook and Google, where digital giants clearly have a large part of the market power pie. It will curb the bargaining power of these digital giants and will aim at reducing abuse of the news providers by stopping the digital giants from using the content of news organizations for free.
This code provides a framework to bargain, reach a settlement, and binds the news organizations and the digital giants into a legal agreement. If they can’t reach a consensus then an arbitral panel will implement the “final offer arbitration” model to decide the level of remuneration by selecting between two final offers made by the bargaining parties. Also, the digital platforms must deliver 14 days prior notice to media houses about algorithm changes that may affect news media businesses. These digital platforms can make standard offers to keep bargaining costs low for small media houses or these media houses can too bargain collectively.
If the digital giants like Google and Facebook ever breach the provisions like failing to negotiate or take part in the arbitration process or failed to follow the arbitration decision or engage in any retaliatory action against the news media houses then they have to pay $10M or 10% of their annual Australian turnover, or three times the benefit obtained, whichever is greater, as a penalty. The amount in the deal that these digital giants have to pay to news organizations could either be on a per-click basis on the link or a fixed amount per month or per year. Also, the Australian government would take into consideration the deals that these news media houses reach with digital giants to decide whether the current law applies to them or not and also give them a one-month notice.
Lastly, the readers while reading news on Facebook and Google won’t see any difference and in fact, this step of the Australian government is welcomed by the majority of the voters as they too agree that Google and Facebook hold much of market power.
However, this legislation will be reviewed within a year of its implementation to see whether it is able to stand on the expectation of the Australian government.
Background
The Australian Competition and Consumer Commission (ACCC), in its “Digital Platforms Inquiry” report in 2019, noted that there was a fundamental imbalance in the power between news media and internet platforms. The report specifically mentioned Google and Facebook as having ‘substantial bargaining power in relation to many news media businesses’, they have more than a billion users and huge financial strength. The report also mentioned that media regulation hardly applied to these digital giants. In the last two decades, there has been a substantial decrease in the traditional news media. Based on this report, the Australian government asked the ACCC to draft a code to regulate these tech giants. Further, in December 2020, ACCC introduced ‘The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill’ in the Australian Parliament.
Facebook and Google retaliated against this by threatening to block Australian news content on its feed and shutting down its search engine in Australia respectively. They said that code undermines the concept of an open internet that people use every day. Australian PM Scott Morisson responded by saying, “we don’t respond to threats”.
It is not only the case in Australia, in 2010 Google shut down its Chinese search engine due to a Chinese-originated hacking attack on them and other US tech companies. In 2014, Google shut its News service in Spain, when a law was introduced to make it pay a license fee to use news content. In France, Google has been forced by law to strike deals with publishers.
Current Scenario
Initially, Facebook in retaliation banned users from sharing links related to Australian news sources, the Australian news houses were not able to host any content on their pages nor the users from Australia were able to share any news link whether Australian or international. But after facing huge resentment from the Australian users, Facebook lifted its ban. Facebook demanded some changes in the Australian newly proposed code for regulating digital giants and after a discussion and amendments in the code, Facebook finally agreed. Both Facebook and Google have committed to invest about $1Bn each, in news around the world in the next three years. Many Australian news media houses like Seven West Media, Nine Entertainment etc. are in talks with Facebook to make a deal.
On the other hand, Australia’s Seven West Media became the first major media group in the nation to sign a licensing deal with Google which is worth more than $30M per year. Also, Google has already made deals with local media houses like the Nine Entertainment, Rupert Murdoch’s News Corporation, etc., and a series of deals including a global content deal with News Corp. It agreed to make licensing deals with French news media houses as France too looks forward to bring in such a law. Apart from these, Google in 2020, made an initial investment of $1Bn to launch ‘Google News Showcase’, a product that the company said would benefit both publishers and readers, as revenue of the participating publishers would increase through monthly payments from Google.
The entire scenario and the making of this legislation have been speculated by other countries of the world like that of Canada, UK, Germany, etc. as they too want and are considering of taking such steps to control the dominance of these digital giants. In countries like France, Germany, and Spain, publishers have pressed on the issue to pass the national copyright laws so that Google has to pay the licensing fees when it publishes the work of news media houses. Even the European countries, led by France, have started to hold investigations and making rule on the subject.
Need for India
It’s high time that India should also start working on making similar laws as these digital giants with their huge market power is a threat to the viability of independent journalism in these democracies. The journalists in India are already a marginalized community, such a law would save them from abuse by the tech giants. India can do so by further amending the Copyright Act or the Information and Broadcasting Ministry and the Competition Commission can set up a panel to draft law as Australia did. Such law will bring in benefits as the domestic news industry will become financially viable as revenue from this industry will increase, due to this, the tax revenue that government gets will increase too as it is easy to collect tax from the domestic industry as compared to international digital giants. Also, many jobs will be saved in the domestic news industry.
The importance behind this law can be understood that in terms of intellectual property. The journalists associated with various news media houses, work tirelessly to gather important pieces of a particular news topic and then put them together in a framework to provide a coherent and concise piece of information to the public. Since, majority of the people nowadays prefer online mode of news reading as it provides vast varieties of topics at any point in time. Taking news content from these media houses and earning huge profits by providing that content to the public is very unfair and leads to the exploitation of mass journalists at the hands of few capitalists.
Conclusion
Various media houses across nations are in dire need of such a law that protects them and an initiative has to be taken by one, so this step of the Australian Parliament is much appreciated and various countries are thinking on the same line to come up with legislation that will curb the unregulated bargaining power and unfair market power of the big tech companies. However, it remains to be seen whether the new Australian law has been able to fulfill its very purpose or it may require some amendments, whatever may be the case, this gives a sense of step in the right direction and development in law to regulate the market power of the digital giants.
REFERENCES:
- https://timesofindia.indiatimes.com/business/international-business/australia-passes-law-to-make-google-facebook-pay-for-news/articleshow/81201268.cms
- https://www.india.com/technology/australia-passes-landmark-law-to-make-google-facebook-pay-for-news-4448726/
- https://www.aljazeera.com/news/2021/2/25/australia-passes-law-making-facebook-and-google-pay-for-news
- https://www.vox.com/recode/2021/2/20/22291425/facebook-australia-murdoch-law
This article is authored by Meghna Pareek, Student at Institue of Law Nirma University, Ahmedabad.
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