Tech giants payments to publishers “just a start”

Published: 19 January 2021

The proposed industry code that would see the tech giants required to pay major news outlets for using content they have made will be debated in the Australian parliament early this year. It has broad support and is expected to be passed into law.

The proposals stipulate that in the event of publishers being unable to reach a commercially satisfactory agreement with the American giants on payment for content, the process would become subject to mandatory price arbitration 

Speaking in a interview for Reuters Next, Rod Sims, chair of the ACCC, signaled clearly that the new rules could just be the beginning of such intervention in the media market: "This bargaining code is a journey, if we see market power elsewhere, we can add them to the code."

Rod Sims, chair of the ACCC

Ultimately, that could mean platforms such as Instagram, owned by Facebook, and YouTube, owned by Google, also being included under the rules.

Speaking about such a broadening of scope, Sims indicated his mind was open on the subject: “Let’s see how it goes; no point trying to optimise now,” he told Reuters.

Making reference to the "divide and rule" situation much of the media finds itself in against the power of the tech giants, Sims was concise in his views: "Google and Facebook don't need any particular news media business, they need them all, but they don't need them individually," he observed. "And so that meant you had massive bargaining power imbalance." 

Facebook has previously said it would move to stop Australian users from sharing news stories on its platform if the proposals went into law.

Google has warned of "dramatically worse" services under the change. It also questioned a requirement under the new rules to give two weeks notice of any major changes in its search algorithm. 

Mel Silva, head of Google Australia

In mid-January, it was noticed that some Australian news sites were being dropped from Google searches, with old content and links appearing, a move confirmed as a "test" by Google.

"We're currently running a few experiments that will each reach about one per cent of Google Search users in Australia to measure the impacts of news businesses and Google Search on each other,” a spokesman told the Sydney Morning Herald, which was affected by the experiment.

A spokesman for Nine, which owns the Sydney Morning Herald, called the test a "a chilling illustration of ... extraordinary market power."

Reacting to the move, Australian Treasurer Josh Frydenburg said: "The digital giants should focus on paying for original content, not blocking it. That’s my message to those digital giants."

Google Australia, headed by Mel Silva, has issued an open letter to its users, warning that the new law would "fundamentally damage Google Search as you know it today". 

You can see the open letter at this link.