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Due to its failure to negotiate with some news sites, including SBS and The Conversation, Former Australian Competition and Consumer Commission (ACCC) Chair Rod Sims said Facebook should be designated under the media bargaining code.
Sims said, “The Treasury is conducting a review. So, let’s see where this leads. But, based on what we know today, I believe you should be designated if you don’t reach an agreement with SBS and the Conversation.”
Being designated under the code means the tech company would be legally required to enter negotiations with eligible publishers or risk fines of up to 10% of Australian revenue.
Sims said that the threat of applying the new regulations to Google and Facebook prompted media businesses to reach commercial agreements faster than the initial plan, arbitration.
“We’re there faster than we would have got through designation than arbitration. People would still be talking now…whereas within six months, we had a vast number of deals done. The objective was having deals done with fairly equal bargaining power,” he said.
The News Media Bargaining Code was first published in July 2020 to have Facebook and Google pay Australian news publishers for the material they contribute to the platforms.
Facebook has secured dozens of deals with local news publishers large and small since then but did not reach agreements with other news organizations such as SBS and The Conversation. Facebook has refused to explain why.
Later on, Facebook stated that it would no longer engage with the remaining parties and that SBS and The Conversation would not receive contracts that risk Facebook of being the first company to be designated under the code according to Sims.
“My own view is that Facebook needs to do a deal with SBS and The Conversation otherwise, they should be designated. That’s an issue for Treasury to advise the treasurer once the review is done. But I think it’s not in the spirit of what is going on here for organisations like this not to get a deal,” he said.
Sims’ remarks came after the issuance of a report that addressed the code’s primary objections, such as the lack of designation and lack of openness in terms of commercial relationships.
Sims will provide the report to the Treasury, which is presently examining the framework’s efficacy and international authorities who have been watching Australia’s handling of discussions between media businesses and digital behemoths. Following the federal election last weekend, the incoming treasurer will decide whether or not to appoint.
In response, Facebook has reserved the right to pull news content in the future if it is subjected to forced negotiation, incorporating clauses in its contracts with Australian publishers that the deals would be null and void if it gets designated under the code.
These conditions, according to Sims, are not a problem since if Facebook is designated, it will have to negotiate with news publishers for payment for journalism or pull news content from the network in Australia.
Sims believes that Facebook needs quality news on its platform which has been criticized for manipulating its algorithm to offer consumers certain information.
Jaw de Guzman is the content producer for Comms Room, a knowledge platform and website aimed at assisting the communications industry and its professionals.
