The ACCC is facing a devilishly complex task in forcing Google and Facebook to pay publishers
By Stephen Brook May 4, 2020 https://www.theage.com.au/business/companies/the-accc-is-facing-a-devilishly-complex-task-in-forcing-google-and-facebook-to-pay-publishers-20200503-p54pdy.html The Australian Competition and Consumer Commission's new code of conduct designed to bring fairness to the digital advertising marketplace will be world-first. But will it be world-class? The fight between media companies such as News Corporation and Nine (owner of this newspaper) and Google and Facebook, pits print against digital, regulation against the open internet, market power against political influence, Canberra against California, Walkley Award winning investigations against cat videos. Our online advertising market is worth about $9 billion a year, and for every $100 spent by advertisers online, excluding classifieds, $47 goes to Google, $24 to Facebook and $29 elsewhere. But given the intricacies of social media ecosystems, the opacity of digital ad markets, the platform and publishers’ co-dependent but mutually antagonistic embrace, the fact that social media and search engines operate completely different revenue models, attempting to find a way forward will not be easy. Technically, the purpose of the ACCC code is to correct the "significant imbalance" between the bargaining power of digital platforms and the news media. In internet searches and social media, Google and Facebook are so dominant they are the gateways to the internet, "unavoidable trading partners" for those seeking to do business on the web. In declaring this the ACCC agrees with the publishers to an extent that has puzzled the web giants. As did the sudden intervention of the government, stung by the closure of local and regional newspapers thanks to the coronavirus advertising collapse. It dumped the voluntary negotiations and demanded a mandatory code. The platforms were blindsided. The ACCC says there is considerable vital and urgent work to be done. It has to formulate a way to value news content. Good luck. The internet is very good at ranking readership of stories, but if my Big Brother exclusive gets more clicks than your political investigation, it is more valuable, right? And you thought putting a price on carbon was hard. News Corp is alive to the risks if the publishers don’t adopt a uniform negotiating position and, say, Facebook closes a deal with Guardian Australia, but not News Corp. It wants a provision that bans data collection until all major news publishers have signed up. The task of designing a mandatory code, with enforcement, penalty and appeal provisions will be very difficult. Even more difficult: enforcing it. Litigation at some point appears certain. Some publishers advocate a licence system, where a designated body collects fees and distributes them to members. But are we ready for a media version of the Australian Wheat Board? Web giants would prefer a pay-per-click system, used in digital advertising. But publishers would shout blue murder, given platforms use "snippets", preview panes to display content, so readers get the story without leaving the site. The news industry must fight hard to avoid the experience of musicians, which get a pittance from the platforms. It took the star power of Taylor Swift to win a victory over Apple, which backed down after announcing it would not pay musicians during free the introductory launch of its streaming service. When Spain forced Google to pay a licence fee for news content, the company shut its local Google News operation down. France is attempting something similar right now. Let’s be clear. All those who consume the news must pay for it, whether they be digital web giants, or humble newspaper readers. But the ACCC must ensure its reforms are not just for the big publishers like News and Nine, but also for the 122-year-old Barrier Daily Truth, which stopped publishing two months ago. It is clear the internet killed print classified revenues just as video killed the radio star. But did those dollars all flow to Facebook and Google or to platforms like Domain and Carsales? We wish the ACCC luck, but it will be difficult to put the genie back in the bottle. -- _______________________________________________ Link mailing list [email protected] http://mailman.anu.edu.au/mailman/listinfo/link
