India should adopt News Media Bargaining Code: Ex-Chairperson, ACCC

Rodney Sims, ex-chairperson of the Australian Competition and Consumer Commission (ACCC) spoke in great depth about the News Media Bargaining Code, which was implemented in Australia in 2021. Sims was part of the e4m-DNPA virtual roundtable, which aims to explore the platform-publisher relationship in the age of rapid digitisation.

He also advised that Indian authorities adopt the News Media Bargaining Code, which governs commercial relationships between Australian news businesses and 'designated' digital platforms.

Sims is an Australian economist and ex-chairperson of the Australian Competition and Consumer Commission (ACCC). He has served as a Principle Economic Advisor to Australian Prime Minister Bob Hawke (1988-1990). He is currently a Professor at the Crawford School of Public Policy.

exchange4media in collaboration with Digital News Publishers Association (DNPA) has organised virtual roundtable conferences with international speakers to decode the 'Publisher-Platform Relationship'. The agenda for the talks is to discuss the challenges and opportunities in the digital media space. The speakers will also address Big Tech's antitrust practices and how news publishers can safeguard themselves.

Talking about News Media Bargaining Code, Sims said, “During the recommendation study we found that Google and Facebook had massive market power and were using the content of media businesses without paying. Facebook and Google desperately needed news media content on their platform. These tech companies did not require news media content from only one media business but on the other hand each media businesses needed to be on Google and Facebook for their survival.”

This led to an imbalance bargaining power, said Sims. "We can describe and say that to be a market failure. As an economist we understand there are lot of market failures. But this one really mattered because it was having a damaging effect on media, journalism and therefore on society because we are certainly very clear that journalism is fundamental to well-functioning society and so this issue had to be addressed.”

Sims elaborately spoke about drafting of News Media Bargaining Code and said, “Initially the government suggested that there will be a voluntary code that would attempt to see an agreement between Google and News Media businesses. The voluntary code did not work and required stronger action and the negotiations started and the government asked ACCC about our views. We gave a view that we did not think that these negotiations will achieve a financial outcome we thought. Later, government directed the ACCC to draft News Media Bargaining Code, so we were closely working with the Minister of Department of Communications. After putting the draft for discussion, the legislation was passed.”

He also explained how Google tried to have an upperhand by threatening the Australian government about withdrawing their Google Search services if the draft tabled by the ACCC gets legislated.

Elucidating further, he said: “The Chief Executive Officer of Microsoft while in conversation with the Australian Prime Minister said that do not worry about losing Google Search and Bing will come to your country and provide wonderful service. This did not play as Google expected and backed out from their plan. Facebook took a different approach and took out all the news content from their Facebook site. The problem with Facebook was they over played their hand. They not only took down the news content but also bush fire warnings and COVID warnings. This led to a backlash and people wanted to get off the platform and eventually Facebook backed down as well.”

He adds, “The three key provisions that matter, one is that there is a provision for negotiation and arbitration so the parties are required to negotiate and if they don’t there is a provision for arbitration. This ensure that the bargaining power is in balance. If you are monopoly, Google is 95% of search in Australia but media business houses have the ability to get the arbitrated outcome then Google has every reason to negotiate and they did.”

Describing about the provision, Sims said, “Secondly, if Google wanted to negotiate with one media business, they had to do it with other media businesses as well and this becomes a fundamental provision. Thirdly, the right to collectively bargain. There were little players so that they can collectively bargain.”

“So in terms of outcomes, over 200 million dollars per year has been paid by Google and Facebook combined. Google eventually did deals with all media businesses that could possibly be eligible. Facebook did deal with news media businesses that probably employ about 85% of Australian journalists to get good data.” News Media Bargaining Code is being replicated in Canada. It is likely get passed in 2023. Similarly the US and UK are also adopting the code as well.

“My advice to India is to copy the News Media Bargaining Code” Sim said.