“News
Corp is an $8.6 billion corporation run from Sixth Avenue in New
York. It is controlled by the (American) Murdoch family. Its
exploits over seven decades have been as brutal and Darwinian as any
media company in history. It has regularly dispensed “we will wipe
you out” threats to small and large competitors across the world.
Now, we’re told, “international platforms” who have “no
commitment to local communities” are responsible for depriving 60
Australian local communities of the news they have depended on for
decades. At some point in Australian history, the malevolent abuse of
power by the billionaire family who milks its former colony will be
exposed.” [Crikey
Editor Eric
Beecher,
News
Corp’s abuse of power must be exposed — and stopped,
3 April 2020]
Well,
good morning. It’s a real pleasure to be here with my friend and
colleague, the Minister for Communications, Paul Fletcher. It’s
time the tech titans were held to account and we had genuine
competition, we have a level playing field, we have more transparency
and we get payment for original journalistic content. The rise of the
digital platforms, and in particular Google and Facebook have
delivered real and significant benefits to consumers. But it’s has
also been a period of great disruption. And it’s called into
question the adequacy of our existing regulatory frameworks and the
viability of traditional media outlets. This is why Scott Morrison,
when he was Treasurer,= tasked the ACCC to undertake a
ground-breaking report, a report that took them 18 months to put
together, into the digital platforms. The ACCC led by Rod Sims,
produced an outstanding report which made a number of
recommendations. Recommendations that the Government has accepted.
One of those key areas of focus for the ACCC was to develop a
voluntary code between the traditional media businesses and the
digital platforms to govern their relationships. Last year, the
Government announced that it hoped a voluntary code would be reached
by November of this year. Well those negotiations were held and no
meaningful progress was made on the most significant component of
which the code was to deal with, namely payment for content. And in
the words of the ACCC, they did not believe that progress would be
made and a deal would be done with a voluntary code. So the
Government's taken a decision to move to a mandatory code, with a
draft mandatory code to be released by the end of July and to be put
together by the ACCC. We hope it will be legislated soon thereafter.
We’re very conscious of the challenges we face and that we are
dealing with some of the most valuable and powerful companies in the
world. In France and in Spain and in other countries where they have
tried to bring these tech titans to the table to pay for content they
haven't been successful. But we believe this is a battle worth
fighting. We believe this is critical for the future viability of our
media sector and it's all about competition and creating a level
playing field. So together with Minister Fletcher and our colleagues
led by the Prime Minister, we will move with the ACCC to put together
this mandatory code in the weeks ahead and hopefully it will deliver
lasting reform for the sector and importantly, ensure that we have a
level playing field into the future…
the
ACCC is going to be looking at the method by which the payment for
content would occur. There are a number of different options. You can
do it on a value option or you can do it on a cost option, meaning
that the tech titans would end up paying a fraction of what the cost
was for producing that original content every time that they use it.
The other alternative is in terms of the value to that particular
digital platform that they get from getting eyeballs onto their sites
by using that content. So this is to be worked out by the ACCC over
the next three months. This is a very significant reform. It’s
about holding these tech titans to account. It’s about ensuring
genuine competition. It’s about delivering a level playing field.
It’s about keeping jobs in journalism, and it’s about ensuring a
fair outcome for all….
...these
are very profitable platforms so this may eat into their
profitability, to the Facebook’s and to the Google’s. But it’s
only understandable that they would be paying for that content that
they use to get traffic through their websites. You see the way
Google and Facebook operate is that they don’t necessarily charge a
fee for their service but they attract eyeballs onto their sites and
then sell the advertising that goes with it. So this is about
ensuring that they are genuinely rewarding and compensating the
content that they use….
...but
what was clear from the ACCC is that on the key issue of payment for
content, there wasn’t a hope that there would be a deal reached
between the parties. And the fact that we could not see a light at
the end of that tunnel meant that we would move from a voluntary code
which was the original intention, to a mandatory code which would be
legislated through the Parliament.
One
independent media company did not agree with Frydenberg’s
assessment of the situation.
Earlier
this week, Treasurer Josh Frydenberg and Communications Minister Paul
Fletcher got up and struck a blow for foreign multinational News Corp
in its ongoing war with the tech giants that have used innovation and
the internet to wreck the Murdochs’ media business model….
...government
has recycled demonstrable lies peddled by News Corp about how it is
being robbed by Google and Facebook, with the aim of helping prop up
News Corp’s failing Australian media businesses….
News
Corp charges that when Google (mostly) and Facebook use its headlines
and automatically generated “snippets” of News Corp stories on
their sites, they are stealing content, and should be made to pay for
it via a licence fee that will “reflect the financial benefit
digital platforms derive from using snippets”.
It
also complains that longer “snippets” deter people from clicking
through the attached link to the original story because they get all
they need from what’s displayed.
Except
the Australian Competition and Consumer Commission’s (ACCC) digital
platforms inquiry found
that News Corp’s claims don’t stack up.
Headlines
and snippets aren’t theft of content: “generally, digital
platforms’ use of article headlines is unlikely to infringe
copyright protections in Australia,” the ACCC noted. “Digital
platforms reproducing a snippet of a copyright-protected news article
does not infringe copyright protections if the snippet does not
reproduce a substantial part of the article.”
And
the ACCC found that the tech companies, media organisations and
consumers all
benefit
from the use of snippets. Specifically, “media businesses benefit
because a snippet provides context and an indication to the user of
the value of that content, increasing the likelihood of consumers
clicking through”.
Real-world
evidence backed this up. “As a result of a German copyright law
requiring Google to pay fees to publish snippets from news media
websites, Google stopped showing snippets from [media company Axel
Springer’s] news articles. Axel Springer noted that the lack of
snippets led to a nearly 40% decline in referral traffic from Google
Search and an almost 80% decline in referral traffic from the Google
News user interface”.
The
ACCC also “does not agree that longer snippet lengths necessarily
have a negative effect on referral traffic, with users remaining on
an aggregator or search platform rather than clicking through to a
news media business’s website”. As a result, it did not recommend
that a mandatory licence fee be imposed.
Where
it did agree with media companies is that they have little bargaining
power with Google et al when it comes to the length and composition
of snippets. They can block Google from automatically generating
snippets, but beyond being able to “opt out”, they have no way of
managing them, or maximising click-through.
The
ACCC thus proposed the industry-led development of a code of conduct
to be agreed between media and tech companies to address this
“imbalance of power” and enable media companies to get access to
data and negotiate more effectively with the likes of Google.
Such
a code of conduct might also cover how revenue is shared “where the
digital platform obtains value, directly or indirectly, from content
produced by news media”.
How
much value do digital platforms obtain from news content? Google
doesn’t show any ads on its news feed, and “does not generally
sell advertising opportunities next to search queries that are
considered by Google as having a ‘news intent’”. In other
countries where it has been ordered to pay fees, it has simply
stopped carrying snippets if it can’t do so for free. In Spain, it
shut down Google News.
Interestingly,
the result in Spain — and one echoed elsewhere — was that smaller
media sites lost a large volume of traffic while major media sites
suffered relatively little loss.
It
would be to News Corp’s considerable advantage if that same result
eventuated in Australia, with smaller competitors in an already
marginal economic environment suffering a major loss in traffic…..
[my yellow highlighting]