Twelve points to help journalists and save democracy

Feb 12, 2021

Despite what the Government and some of the mainstream media will have us believe, the “News Media Bargaining Code” does nothing to protect or enhance quality journalism in Australia. There are better ways to achieve that.

The Morrison government and the Australian Competition and Consumer Commission (ACCC) are locked in a battle with Google and Facebook to break what it asserts is a “massive bargaining power imbalance” held by the two big tech firms over news businesses.

Google leaving Australia serves nobody, but it is not an empty threat

According to the ACCC, this “bargaining power imbalance” forces the news businesses to accept “terms of service that are less favourable”.  The ACCC does not say what it is less favorable than, but obviously not less favourable than terms provided to every single other news market and wider information market entrant. All content providers are offered the same terms of service by search and share platforms such as Google, Facebook, Twitter, Bing and Instagram. They all provide links between readers and their content for free.

It is impossible to see how news businesses can get better terms of service than that, although the news businesses have found a way. They have submitted that Google and Facebook should pay them for the privilege of providing the search and share services that the digital giants have been providing to news businesses for free for nearly two decades. The better terms of service that the news businesses are angling for are that some of their costs will be covered by their competitors – upwards of $1 billion a year if News Corp has its way.

There is no precedent for such an arrangement in competitive markets. But the ACCC has seen fit to develop a News Media Bargaining Code that will in fact reverse the supposed imbalance in favour of the news businesses.

Market interventions are sometimes justified, but they are meant to correct, not reverse, imbalances. Moreover, the ACCC’s data do not establish that an imbalance exists, let alone the “massive” one asserted by the ACCC chairman, Rod Sims. The ACCC’s data indicate that while Google services 94% of search requests in Australia, this does not translate to a monopoly in digital advertising revenues – far from it.

According to the ACCC, Google “only” commands 42% of digital advertising revenues in Australia. The news media platforms themselves follow closely, with 39%, when their income from digital classified and display ads is included. Facebook brings up the rear with only 19%.

When the total market of available advertising revenues is taken into account, Google and Facebook’s shares are only 22% and 10% respectively of the total available advertising revenues. The “old” news media businesses still enjoy more than 60% of the total available.

Advertising market revenue
Advertising market revenue in Australia

This “battle” is all about advertising market share. With the rise of digital advertising, news businesses no longer command the 90%-plus market share of available advertising revenues they used to have.

The ACCC’s job is to put consumers first by maintaining a level playing field for competition. A mandatory code that can only reduce competition in both news and advertising services is not a reasonable way to support consumers. It favours the traditional news businesses too heavily by giving them preferential terms for distribution on the web, thus reducing, not enhancing, diversity of journalism in Australia.

Here are 12 far less costly and disruptive actions the Morrison government could take to help journalists play their part in supporting an open democracy:

  1. Make FOI applications easier and cheaper: stop knocking back federal FOI applications back at unprecedented rates and redacting, without accountability, large slabs of material.
  2. Develop and maintain real time transparent registers of lobbying and political donations: save journalists the trouble of having to develop their own “Citizen’s Transparency Hubs” such as the one developed by The Guardian.
  3. Stop criminalising public interest journalism: stop intimidating journalists through threats of jail sentences. Journalists in a democracy are supposed to hold governments to account and shouldn’t be threatened for doing that vital job.
  4. Lift the veil of secrecy on government misconduct: reverse some of the national security laws that now make it impossible to hold governments to account for any illegal behaviour in relation to classified security matters.
  5. Establish a federal integrity commission: AAP and other wire services could then afford to assign journalists to centralised corruption inquiries.
  6. Reverse cross-media ownership laws: stop allowing one or two mega news businesses to own all three non-digital platforms (print, TV and radio) in one geographical area.
  7. Develop regulations to prevent further media market power imbalances: for example, prohibit Murdoch from disabling AAP and prohibit any news business from acquiring a search engine and thereby vertically integrating news production and distribution (the Code, if it proceeds, will help Murdoch by facilitating a raid on Google).
  8. Stop de-funding the main independent news agency we are lucky enough to have – the ABC: stop pressuring it (via that de-funding and raids on sources) into less and less editorial independence. Reinstate the $783 million cut from the ABC’s budget since 2015.
  9. Avoid plunging news businesses into further decline in editorial integrity by deleting provisions in the Code requiring notice of algorithm changes: this simply provides news business with information about where clicks will come from and will narrow diversity of content. Replace the Code’s algorithm notification provisions with a requirement to submit codes of practice for approval by ACMA and independent compliance audit.
  10. Fund government agencies vital to the support of journalism: ensure ACMA is resourced and independent so that it may do a better job of maintaining compliance with approved journalistic standards and reverse funding cuts to the Australian Bureau of Statistics.
  11. Create an Australian Commission for Independent Public Interest Journalism: hypothecate the taxes paid by digital platforms and news businesses. This Commission could function in a similar fashion to the Australian Olympic Commission, which identifies high quality athletes for receipt of grants to improve their chances at the Olympics. The Commission for independent journalism would have to ensure it approves grants only to news agencies, journalists or news project proposals that are genuinely independent.
  12. Commence a nationwide community engagement process for development of a legislative framework for ethical and fair regulation of a free and open democratic digital information market.

We are still at the start of the digital age, yet governments have lagged behind on the regulation of the now massive information market that is needed to protect our democracy. There is too much focus on the faults of the digital platforms while  governments fail to do their job in designing the sort of legal framework necessary for regulation of a changed media market.

Australia’s government could lead the world in this area.

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