A “collective boycott” of Google and Facebook may be an effective tool to force the digital giants to share advertising revenue with media companies, the competition watchdog has suggested.
Preventing Google and Facebook from using Australian news is one of the mechanisms outlined in a paper released by the Australian Competition and Consumer Commission on Tuesday which gives the first insight into how a mandatory news media bargaining code could work.
Last month the treasurer, Josh Frydenberg, instructed the competition watchdog to urgently develop the mandatory code amid a steep decline in advertising brought on by the coronavirus pandemic, and because Facebook and Google refused to accept they needed to pay for using news content.
An enforcement body with the power to impose financial penalties on players who don’t comply with the code and a definition of news which is worthy of compensation are some of the other issues to be debated before submissions close on 5 June. Some media organisations have argued the definition of news should include sport, entertainment and even reality TV recaps ,while others have said it should be confined to hard news such as politics, courts and crime.
“A collective boycott, or the threat of a collective boycott, may encourage each of Google and Facebook to offer news media businesses more appropriate remuneration for the use of their content,” the concepts paper which canvasses different mechanisms said.
The chair of the ACCC, Rod Sims, said the tight timetable had been influenced by the urgency of the media crisis due to the collapse of advertising revenue during the pandemic, but resolutions may not come in time for some media organisations.
“Covid is a force majeure event of all time,” Sims said. “Clearly it’s affecting local news. No point having a local pub advertise in the paper if the pub is closed. The code will help, whether it helps in time I just don’t know.”
BuzzFeed’s Australian news operation and the digital news site 10 Daily both announced they were closing in the past week, putting 25 journalists out of work.
Sims dismissed claims by Google’s managing director, Mel Silva, that the search engine struggles to make money from news.
“It’s really about what is the value of news collectively to the platform,” Sims said. “To what extent do they want to be the go-to destination for everything?
“If you want to be the all-singing all-dancing search engine you need news so that when someone puts in ‘coronavirus’ they get all the news articles [instead of] a whole lot of fake news.
“They talk about their mission benefiting society. Well, journalism benefits society, how important is it to them to be part of that?”
Sims said the commission is aware the world is watching how Australian regulators implement this “big regulatory step”, and he is upbeat about succeeding where other countries in Europe have failed.
“I am certainly conscious that a lot of countries are watching what’s going on here,” Sims said. “I understand that may mean Google and Facebook are less willing to go along with things because of the precedent it sets.
“They also have to realise the world is changing and that having an unequal bargain between two very dominant distributors and greatly dispersed content providers where that content is just so fundamental to society is just not sustainable as it is.
“I suspect they realise something’s got to happen here.”
As well as collective boycotting, the paper canvasses the possibility of collective bargaining to get a deal with the digital giants, but warns it may not work for some news organisations.