International interest has sparked a spirited debate about the effectiveness of Australia’s legal system.
“We know it works because we can see the evidence,” Fletcher asserts. He emphasises how the deals are used to support journalism in rural areas. The ABC stated that it was able to hire 50 regional journalists as a result of its deals with Facebook and Google. Google, on the other hand, takes a contrary position. It has charged that the media code stifles media diversity by favouring media conglomerates over smaller publishers. “The primary beneficiaries of such a code would be a small number of established media providers,” Google wrote in a submission to the United States Copyright Office, which is currently revising its own media laws.
Big Tech to pay
Australia may have laid the groundwork for compelling Big Tech to pay for news, but it has yet to implement it. Only those technology companies named, or “designated,” by Australia’s treasurer can be compelled to enter the arbitration process with news organisations under the code. However, no technology-related site has ever been designated. Rather than that, Google and Facebook have been rushing to reach private agreements with news organisations in order to avoid the potentially more costly arbitration process. For the time being, the law acts more like a “loaded gun,” compelling these companies to reach an agreement, according to Bernard Keane, politics editor at news website Crikey. “I would not characterise it as a threat,” Fletcher says. “What I’m referring to is a mechanism that strongly promotes commercial negotiation.”
Allowing Google and Facebook to negotiate these deals behind closed doors creates an air of mystery about their terms. The agreements are structured as if media outlets are being compensated for their contributions to Google News Showcase or Facebook’s News tab. “The reality is that no one is actually using those products,” according to an unnamed source who negotiated on behalf of an Australian publisher. “They are a mechanism for facilitating these payments in a way that does not fundamentally alter their business model or establish a precedent applicable to other parts of the world.”
News Corp’s deals
According to the source, these deals can cover approximately 50% of total editorial costs. However, there is considerable variation in the compensation paid to outlets. The Conversation, a publication that publishes academic articles, claims that its Google deal covers the salaries of “one or possibly two” journalists. When WIRED inquired about the value of News Corp’s deals, the company pointed to comments made by CEO Robert Thomson in November, in which he stated that the company’s technology platform deals generate more than $100 million in annual revenue.
The criticism levelled at Australia’s system is that it lacks transparency, which means that media companies cannot compare notes on the deals they are offered and that there is a lack of clarity regarding which outlets are authorised to negotiate.
Misha Ketchell, editor at The Conversation Media Group, expresses satisfaction with the Google deal he negotiated. However, when the outlet approached Facebook about a deal, the platform refused to negotiate, despite the fact that The Conversation meets the code’s criteria. “I believe Facebook made a decision regarding the minimum number of transactions required to avoid the government designating them as violators of the code,” he says. The Conversation has not yet attempted collective bargaining, he adds, which allows smaller outlets to band together and leverage their bargaining power with platforms.
The Conversation is not the only publisher to be rejected by tech companies. While ABC, a public broadcaster, has partnerships with Google and Facebook, another public broadcaster, SBS, does not. Google’s claim that the code favours incumbent media businesses is being used against it by critics who allege that Google and Facebook give those same media organisations preferential treatment in the deals they award. “There is no reason why the code, as it is currently implemented in Australia, cannot benefit all media companies,” says James Chessell, managing director of publishing at Nine, one of Australia’s largest media conglomerates. “I believe it is up to the platforms to ensure that happens.”
Concerns about the code’s shortcomings have spread to Canada, where Justin Trudeau’s Liberal Party is drafting its own legislation in the style of Australia. “We’re suffocating incumbent publishers and suffocating Google and Facebook’s dominance, rather than countering both sides’ dominance,” says Dwayne Winseck, a journalism professor at Canada’s Carleton University. Additionally, he believes Australia’s code is unambitious in comparison to the magnitude of the news industry’s problems. Between 2011 and 2020, revenue in Canada fell by more than CA$3 billion, according to News Media Canada, an association representing more than 500 Canadian publishers.
Nonetheless, Canada’s news industry is willing to overlook these constraints because it views cash as a lifeline, according to Paul Deegan, president and CEO of News Media Canada. “What we keep telling every politician we meet is that, given the economic situation we’re in, we’re in desperate need of speed,” he explains. He explains that they are running out of time to save some of the media landscape—40 newspapers have closed permanently since the pandemic began. “We have a number of titles, and even chains of titles, that are literally on the verge of failure.”
Deegan concurs that the code is not flawless. This is not a panacea, he asserts; rather, it is a much-needed Band-Aid.
According to Peter Grant, a retired lawyer who drafted a memorandum for News Media Canada on how to make Australian law work in Canada, only minor changes to the template would be required. He, too, believes that this is not a panacea that will save journalism. “It is not the end all and be all,” he emphasises. “It is a critical component of a broader strategy to bolster journalism.”
Perhaps only a country like Australia—where former Prime Minister Malcolm Turnbull described News Corporation as the country’s “most powerful political actor”—could have been the world’s guinea pig in the effort to redirect tech profits to the media.
However, even critics of the code acknowledge that it may be a useful starting point. Emily Bell, director of Columbia University’s Tow Center for Digital Journalism, expresses concern about the code’s lack of transparency, but admits that Facebook and Google have paid more to Australian publishers through philanthropic donations than they do elsewhere. “However, we do know that some legislation is preferable to none.”