Australia’s news media bargaining code is worth emulating

The recent move by Australia’s competition regulator, persuading platform giants Google and Facebook to pay for news content they distribute, can transform the information economy in creative ways. The draft news media bargaining code released this week by the Australian Competition and Consumer Commission sets out to create a level playing field in the information business — by allowing news content creators to enter into fair bargains with tech companies that aggregate and disseminate such content. The draft code wants platform companies to pay for news they display on search results and acknowledge the intellectual property rights of the content creators. Platform companies, especially Google, have maintained that since they sell advertisements and not the search results, they are not obliged to pay content creators.

Regulators across the world, including in countries such as France, the UK and now in Australia, don’t seem to be in agreement with this argument. The dynamics of the platform economy are revealing enough. For Google, news accounts for over 40 per cent of its search pie. In 2018, reports quoting New Media Alliance (NMA), an American trade body, said Google made a whopping $4.7 billion from the news industry — triggering a controversy over the way the search giant exploits the news industry, which has been in crisis ever since digital technologies have disrupted the media space. Although Google never confirmed the NMA numbers and a few experts termed them guesstimates, the fact remains that search giants make a killing from their news aggregation services, thanks to their clout in controlling what to display, when and how. Content creators have never had any say or stake in this game.

The Australian code seeks to address the power imbalance between news media businesses and digital platforms. Forcing platforms to share a slice of their profits with news companies can also help the funds-starved media industry find a new stream of revenues. It can go a long way in nurturing independent journalism. Platform companies are no longer the nimble start-ups they used to be a few years ago. Facebook’s net income (after tax) rose 98 per cent in the second quarter of 2020 to $5.2 billion on a revenue of $18.6 billion (up 11 per cent). Google parent Alphabet, however, recorded a Q2 revenue decline of 2 per cent ($38.3 billion), yet exceeding market expectations, while its profit fell by about 30 per cent to $7 billion. It has been impacted by the pandemic impact on ad spend. Be that as it may, their revenue kitty is formidable and the news industry is entitled to a just share of the pie. Indian regulators need to take a cue from their Australian counterparts.

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