Australia has landed on a media bargaining code, which will compel Big Tech to pay for news. Here are 5 things you need to know.

Justin Sullivan/Getty Images
  • The federal government is introducing legislation to enshrine Australia’s new media bargaining code in law.
  • The new code will compel Facebook and Google to negotiate with media companies on an individual basis, or collective for smaller publishers, to come to an agreement on the price they pay for Australian news.
  • The platforms will also be forced to reveal when they make major changes to their algorithms that affect the display of news content.
  • Visit Business Insider Australia’s homepage for more stories.

After years of terse negotiations, often in the public spotlight, Australia looks to have finally settled on the terms of trade between big tech and local media companies.

On Wednesday, the federal government will introduce new laws that will force Google and Facebook to pay news organisations to use their journalism.

While neither side finds the new bargaining code a perfect solution, it’s what Australian policymakers have settled on, ending a two-year battle over what the new terms of their stained relationship should look like.

Here’s what you need to know.


The new code will compel big tech to pay for news

AAP Image/Lukas CochTreasurer Josh Frydenberg, who introduced the legislation earlier this week.

Treasurer Josh Frydenberg and Communications Minister Paul Fletcher this week previewed the new terms of engagement ahead of the legislation being unveiled.

Effectively, it pushes Google and Facebook to negotiate with each individual media company over how much they will receive for access to news content. Public broadcasters SBS and the ABC will be included in these negotiations, despite their reliance on public funding.

Smaller media players will be permitted to conduct negotiations collectively or accept “standard” terms.

“There are deals that may be struck very soon between the parties,” Frydenberg said.

The code also forces Google and Facebook to update media companies on any major changes to how they rank and display articles within 14 days of making them.


If the parties can’t come to an agreement, it will go to arbitration

Getty Images

Whether they like the code or not, tech and media companies don’t have a get out clause.

If they’re unable or unwilling to land on a figure, an independent arbitrator will find one for them. They will be required to consider the presence of the media organisation on the digital platform, and weigh up the benefit of the relationship to each party before designating a sum to be paid.

It’s unclear so far what kind of money is being talked about with negotiations ongoing.


The code only applies to specific parts of Google and Facebook’s businesses

Getty Images

Significantly, the media code will initially apply only to certain platforms and not to the entire companies involved. Right now, only Facebook’s News Feed and Google’s Search are subject to negotiations.

While Facebook owns Instagram, it is not required to pay publishers for content shared on that particular platform, nor are Google-owned platforms like YouTube.

It’s not to say the code is carved into stone. On Tuesday, Frydenberg noted big tech platforms other than Facebook and Google could be included if the government decides they wield enough market power.

With the two companies snapping up every tech company from WhatsApp to Android, that could include other parts of their businesses, or could come to cover other platforms that reject the lure of their chequebook.


Tech companies have fought the code tooth and nail

Getty Images

While both Google and Facebook have withheld comment until they see the actual legislation, it’s likely they’re not chuffed with the code.

After all, they will be now compelled to pay for something to which they had free access for years. They’ve hardly been subtle in expressing their contempt so far.

Earlier this year, Facebook threatened to eliminate Australian news altogether, claiming the impact would be minimal. Google meanwhile became embroiled in a fight over its algorithm, with the ACCC slamming its public concerns as “misinformation”.


Media companies aren’t necessarily sold on it either

AAP Image/Mick Tsikas

Media companies have generally welcomed the introduction of a code, pleased that it will generate some money for news coverage. One however appears to still have some hangups.

A spokesperson for Nine, one of the biggest media players in Australia, criticised the fact that any arbitration will consider the value provided by both sides.

“While we are grateful for the ACCC code process, the continued concessions to the digital platforms only entrenches both their monopoly power and the significantly unfair imbalance in regulation. These companies pay little or no tax, contribute little and often negatively to our culture, and employ no creative teams,” they told the AFR.

“The notion they receive regulatory recognition with the so-called two-way value exchange, for something they already have a commercial model to monetise, seriously undermines the fundamental problem the ACCC identified in the beginning of this process – that is an abuse of monopoly power which fundamentally harms the future sustainability of media in Australia.”

News Corp Australasia chair Michael Miller disagreed, saying simply that the two sides of the negotiating table would argue down the other’s value.

Either way, any qualms will be swept aside as the government introduces its self-proclaimed “world first” legislation.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.