Mandatory bargaining code does little benefit for Australians, says GlobalData

In response to the Australian Parliament’s Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill, which went into effect on 17 February 2021, Facebook has decided to pull all content and links from designated Australian news sources from its platforms. Against this backdrop, Australia is relatively a small market for big companies such as Facebook and Google, and the law does little benefit to Australians, says GlobalData, a leading data and analytics company.

Reportedly, Facebook pulled down community pages, news regarding Australian health matters, and others that might regarded as providing valuable information services for the community.

Malcolm Rogers, Senior Analyst of Technology at GlobalData, comments: “Facebook invests heavily in its platform maintaining servers, networks, moderation teams to provide a free service in Australia. While Facebook’s removal of news content is likely not permanent, it has caused some immediate damages to the public.”

Several people use Facebook to access important information about topics such as COVID-19, community events, news and health services.  The broad language of the law used means the nature of the news content that could apply is vast.”

While some may claim Facebook is being greedy, the company is facing a new financial burden and the law gives Facebook the right to pull Australian news content in response. In addition, the law gives special bargaining powers to a certain subset of Australian media companies that have very specific rules and regulations around who qualifies. Australian news businesses now have an incredible leg up in the content and media market within Australia.

Mr Rogers continues: “It is likely that the largest media organisations will benefit the most. The largest news and media outlets in Australia have the resources to win renumeration either through negotiation or arbitration.”

In fact, Google has already negotiated deals with several Australian news companies, most recently Rupert Murdoch’s News Corp. However, smaller niche or local outlets do not bring the same net benefits to large digital platform providers and will have less bargaining power in negation and might not be able to afford the costs of an arbitration.

Mr Rogers explains: “if the Australian government is interested in providing a better competitive environment for media within the country, giving News Corp another bargaining chip is not the way to go.  While Facebook and Google have massive influence across many sectors of the Australian economy, strong arming them into paying a small group of Australian media outlets does very little if any to benefit the public.”

In addition, Facebook and Google are aware of the benefit of quality journalism has towards there platforms and have begun programs to help news organizations monetize their content without the need for a new law.

Facebook launched a news content licensing platform in the UK after discussing with the news media industry and before any laws were implemented by the UK parliament.  Google also launched a similar service called “News Showcase” in UK which subsequently launched in Australia, which it will roll out to other markets with the backing of a A$1.3bn investment.

Mr Rogers concludes: “With the rise of Google and Facebook, there is an important conversation to be had around the fair and equal access to journalism and other media, but the newly written law does little to achieve this and the Australian public will likely be worse off for it.”

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