On Tuesday competition watchdog the ACCC released a “concepts paper” on the forthcoming government-mandated code that aims to equalise the relationship between news media and digital news platforms.
This is the same code that was announced by Treasurer Josh Frydenberg last month. Back then it was a “mandatory code of conduct”, now it’s taken a side-step and has become a “bargaining code”.
That side-step won’t be enough to throw off the collision that is just around the corner. The concepts paper is smart and well structured, and shows that the ACCC has understood many of the difficult aspects of the relationship between news media on one hand and Facebook and Google on the other.
But the problem with the code is deep enough that no amount of clever drafting will cover it. The mistake will probably surface in the form of very little revenue for news organisations. And when that happens, the parts of the media that have been agitating so strongly for a solution to their problems will focus their disappointment on the ACCC and the government. It’s going to get ugly.
The heart of the issue is there on the first page of the concept paper: it states the purpose of the code is to “ensure that commercial arrangements between the parties do not undermine the ability and incentives for news media businesses to produce news for Australians.”
Implied is that the existing relationships between Facebook and Google and news media are hurting the latters’ ability to make news. That’s not true: these relationships, no matter how unfair you think they are, are not killing news. And what will save news cultures all over the world cannot be as simple as a new deal. I covered the real culprits for news decline previously so I won’t repeat myself.
Yes the rise of the attention and revenue machines known as digital platforms has coincided, more or less, with the fall of traditional news companies, and the two phenomena are linked. It’s just that the relationship between the parties is not the causal factor. Correlation doesn’t equal causation.
The ACCC can’t do much about its doomed adventure at this point. It’s set off and it can’t turn back. The concepts paper released on Tuesday makes it clear just how enormous the task is, with no less than 59 questions that have to be answered before the code can be written. Some are easy – “should the code have a compulsory review mechanism?” – but most are horribly difficult. The kinds of exam questions that you’d skip: “How can a bargaining code ensure that both news businesses and digital platforms can easily and objectively identify the content subject to the code?”
The paper poses questions relating to:
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- Digital platforms and news media covered
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- What content is news
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- How deals can be negotiated fairly
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- Value platforms get from news
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- Value news media get from platforms
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- Whether the cost of making news is relevant
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- Sharing user data
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- Transparency of feed and search algorithms
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- Crediting of fresh or original news
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- Dispute resolution
The most interesting parts of the concept paper concern a suggestion that news media be permitted to collectively bargain and boycott Facebook and Google. This cartel behaviour would be allowed by the ACCC to redress the current bargaining imbalance.
A boycott is fascinating because it is probably the only way you can work out the true value of news content to the digital giants. If you turn off the news, what happens to Facebook and Google? How much revenue do they lose? How much audience and revenue do the news media lose?
Like all collective action, this would rely on solidarity within news media. It would be extremely tempting for a single organisation to break ranks and make money hand over fist as the only digitally-connected news source. This implies a level of coercion necessary within the news union, which in turn rests on meaningful membership privileges and responsibilities. We are back at the truly impossible exam question: can information be controlled in a free society?
If you believe Google and Facebook, a boycott would also demonstrate that they don’t actually make much money from news. Let’s picture it for a moment: no locally produced national news in Google News, no search results, no articles posted in Facebook news feeds, no membership page updates. It’s a massive disruption. Where does the audience turn? They might head back to homepages – this is the industry dream – or they might get their news internationally. It’s a big gamble.
On the other side, everyone in the news industry has experience, often bitter, of their reliance on digital platforms, so we all know and can quantify the kind of hit that audience and revenue would take in the short term. I suspect that the impact of the Great News Blackout might be a lot worse for news media than anyone else, and far from teaching digital giants a lesson, could end up underlining how profoundly the world has changed.
NEXT INSTALMENT:
I claimed in the first piece that the ACCC’s mandatory code would fail either through low revenue (if it were realistic) or after being legally challenged (if it were unrealistic). The legal side of the question has proved difficult to pursue further, if only because legal commentators are reluctant to talk on the record. I will post on this in coming days.